Businesses push back against 'anti-business' bills following tariff deal

Sohn Kyung-shik, left, chairman of the Korea Employers Federation (KEF), speaks during a media conference at the KEF building in Seoul, Thursday. Yonhap

Business circles are stepping up their opposition to what they call "anti-business" bills — the additional amendment to the Commercial Act and the revision to the Trade Union and Labor Relations Adjustment Act — following Korea's pledge to invest $350 billion in the United States under the Korea-U.S. tariff agreement, industry officials and politicians said Friday.

The ruling Democratic Party of Korea (DPK)-controlled National Assembly passed the first phase of the Commercial Act amendment on July 3, aimed at strengthening minority shareholder rights and curbing the influence of major shareholders. The party is now pushing for a second phase with tougher regulations.

It is also advancing the “yellow envelope law” by revising the Trade Union and Labor Relations Adjustment Act to give subcontracted workers greater bargaining power and restrict companies from claiming damages caused by strikes.

Business groups are strongly opposing the bills, saying they infringe on management rights. They also argue the proposals conflict with the Lee Jae Myung administration’s pledge to pursue pragmatic, market-oriented governance.

Citing the support of corporate leaders — including Samsung Electronics Chairman Lee Jae-yong, Hanwha Group Vice Chairman Kim Dong-kwan, and Hyundai Motor Group Executive Chair Chung Euisun — who backed the country’s negotiation efforts during the final phase of the tariff talks, the groups are calling on lawmakers to halt the legislative process.

The main opposition People Power Party (PPP) is also warning that passing the bills could negatively impact Korea’s pledged investments in the United States under the new tariff agreement.

Despite the backlash, the DPK remains committed to pushing through the bills next week.

On Thursday, hours after the Korea-U.S. tariff deal was reached, Sohn Kyung-shik, chairman of the Korea Employers Federation, held an emergency press briefing, urging the Assembly to stop advancing the controversial bills.

“If numerous subcontractor unions demand direct negotiations with prime contractors, the industry will face severe disruption. The contractors cannot handle bargaining requests from hundreds of subcontractor unions individually,” Sohn said.

Sohn also expressed concern that the shipbuilding sector, which plays a major role in the $150 billion "Make American Shipbuilding Great Again" project under the tariff deal, could be negatively affected.

“One shipbuilder has over 3,000 partners, another more than 1,500. If all of them demand union talks, it will cause serious problems,” he said.

Six major economic organizations, including the Korea Chamber of Commerce and Industry, also released a joint statement, calling for careful consideration of corporate-related bills in the Assembly to ensure they strengthen the global competitiveness of Korean businesses.

People Power Party lawmakers stand in protest against Rep. Lee Choon-suak of the ruling Democratic Party of Korea (DPK), who chairs the Legislation and Judiciary Committee, after the DPK unilaterally passed the revision to the Trade Union and Labor Relations Adjustment Act, also known as the “yellow envelope law,” at the National Assembly in Seoul, Friday. Yonhap

Korea finalized a tariff deal with the U.S. that sets a "reciprocal" tariff rate at 15 percent, much lower than the initially proposed 25 percent. A key part of the agreement requires Korea to invest $350 billion, or approximately 490 trillion won, in the United States.

Given that Korea’s entire annual government budget is about 656 trillion won, with about 200 trillion won available each year after fixed expenses, relying solely on government funds will be difficult, though details for the investment have not been decided. As a result, active participation and investment by Korean companies are considered crucial.

The PPP insists that what is needed now are incentives for companies, not laws that could obstruct business operations.

“Rather than creating a business-friendly environment, the government is pushing companies away,” said Rep. Song Eon-seog, the PPP’s interim leader, urging the ruling party to stop advancing the controversial bills and establish a bipartisan panel to hold thorough discussions.

The DPK, however, emphasized that U.S. investment commitments and the proposed bills are unrelated.

“Both the Commercial Act amendment and the Yellow Envelope Act will be passed during the plenary sessions next Monday and Tuesday," said Rep. Kim Byung-kee, acting leader and floor leader of the DPK.

A senior official at the DPK who declined to be named claimed that the argument that these bills burden businesses is a misunderstanding, explaining that the tariff deal is intended to create favorable conditions for companies to win local contracts.