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US ups pressure on Korea’s platform law as tariff deadline looms
The logos of Google, Apple, Facebook, Amazon and Microsoft are displayed on a mobile phone and a laptop screen in this photo taken Dec. 18, 2020. AFP-Yonhap
By Park Jae-hyuk
US lawmakers blast Seoul’s bill as discriminatory to American firms
President Lee Jae Myung’s pledge to regulate monopolistic online platforms has emerged as a key sticking point in ongoing trade talks between Korea and the United States ahead of the July 8 deadline — the day the pause on U.S. “reciprocal" tariffs is set to end.
While tech giants urge Korea to reconsider the Online Platform Act, U.S. government officials and lawmakers are calling the plan a nontariff barrier.
Earlier this week, Republican Reps. Adrian Smith and Carol Miller said they led 41 colleagues in sending a letter to U.S. Trade Representative Jamieson Greer, Treasury Secretary Scott Bessent and Secretary of Commerce Howard Lutnick. In the letter sent Tuesday, the lawmakers — including Korean American Rep. Young Kim — urged the Donald Trump administration to address what they called the Korean government’s “unfair” barriers targeting American digital services providers.
“One barrier that we urge you to address in any negotiations is proposed legislation advanced by the Korea Fair Trade Commission and embraced by the new Lee Jae Myung government which disproportionately targets U.S. digital companies for heightened regulatory requirements,” the letter read. “This legislation would also advance the interests of the Chinese Communist Party by disproportionately targeting American companies while exempting major Chinese digital giants like ByteDance, Alibaba and Temu.”
Trade Minister Yeo Han-koo, left, talks with U.S. Rep. Adrian Smith at the U.S. Capitol in Washington, June 26. Courtesy of Ministry of Trade, Industry and Energy
According to the Wall Street Journal, Washington’s negotiators also raised the digital trade issue with Trade Minister Yeo Han-koo during his visit to the U.S. capital last week.
“Its proposed regulations on U.S. e-commerce firms doing business in South Korea have drawn the ire of Greer and American firms such as Google and Coupang, further complicating negotiations,” the newspaper said Wednesday.
Last month, the U.S. Chamber of Commerce issued a statement reaffirming its negative stance on Korea’s platform regulations.
“The Chamber is ready to work with the Lee administration to facilitate the enhanced contribution of American business to the Korean market with particular attention to the healthcare, financial services, energy and digital economy sectors,” it said June 16. “In that latter regard, we strongly urge Korea to refrain from implementing platform regulation that would unfairly impact American companies.”
Even before Lee’s inauguration, Korea sought to regulate monopolistic online platforms to protect users. Under the previous Yoon Suk Yeol administration, there were bipartisan efforts to pre-designate major online platform operators subject to stricter antitrust regulations. Although the antitrust regulator ultimately decided to target dominant players only when irregularities are uncovered, the U.S. has continuously objected to the proposed changes, warning of possible retaliation.
In response to the pressure, the government is reportedly planning to include clauses aimed at easing U.S. concerns in a trade proposal to be sent to Washington later this week.
“We will make sure that the Trump administration’s hardline stance on other countries’ digital regulations will not develop into a trade dispute and have any negative impact on the Korean economy,” a senior trade ministry official told correspondents in Washington on June 27.
However, Korea still faces the possibility of its exports being hit with at least a 20 percent tariff in the U.S., as Vietnam agreed to the rate on Wednesday. Given that Samsung, LG, Hyosung and many other Korean manufacturers export products to the U.S. from Vietnamese factories, the latest deal will also affect their businesses.
Industry officials forecast there is a slim chance of Trump imposing lower tariffs on “latecomers” that have been relatively passive about striking a tariff deal.