Connect with us

Business

Low Tariffs Aren’t Enough: Korea Should Remove Its Trade Barriers With the United States

Regulatory barriers, not tariffs, now define U.S.-Korea trade tensions, especially in digital sectors

Published

on

Regulatory barriers, not tariffs, now define U.S.-Korea trade tensions, especially in digital sectors

What matters now in U.S.-Korea trade isn’t what crosses borders but the rules and restrictions that await beyond them. While tariffs have steadily declined under the bilateral free trade agreement (KORUS), American firms continue to face a dense layer of regulatory obstacles—from opaque rules to sector-specific constraints—that limit market access and distort competition. This tension is most evident in digital services, semiconductors, and cloud infrastructure, where American firms play a foundational role. Yet while Korea benefits from U.S. defense and market access, Korean authorities often treat these companies as digital outsiders. After a period of escalating tariff tensions between the United States and South Korea, a recent agreement to pause reciprocal tariffs for 90 days has created a diplomatic window for Seoul to reset and reaffirm its commitment to balanced and frictionless trade.

KORUS brought average tariff levels below 3 percent in 2024, and that level is expected to fall even further—below 0.5 percent—by 2026. But that openness is increasingly challenged by a trend toward regulatory protectionism at home. Even though U.S. firms are key players in Korea’s innovation economy, they are confronting rising digital compliance burdens and proposed competition rules such as the Platform Competition Promotion Act (PCPA) that appear likely to disproportionately affect foreign platforms. This two-tiered approach is fueling frustration in Washington and feeding into the Trump administration’s broader trade recalibrations.

While much of the Trump administration’s trade tactics have been criticized, not everything about Trump-era trade policy is off base. Since Trump arrived on the American political scene a decade ago, his coalition has accurately diagnosed that the status quo of the global trade system, particularly ignoring China’s violations of its World Trade Organization (WTO) commitments, were among the causes of the deindustrialization of the American economy. For South Korea, the message is clear: Beneath the rhetoric lies a legitimate concern that allies have not always played fair, ultimately harming American manufacturing.

South Korea’s use of nontariff barriers (NTBs) illustrates this concern. In particular, the Korea Fair Trade Commission (KFTC) has emerged as a key driver of these procedures targeting foreign firms. For example, KFTC last year fined Coupang—a U.S.-based firm that generates over 40 trillion KRW ($28 billion) in annual sales in Korea—approximately 140 billion KRW ($98 million) for common retail practices like algorithm-based product placement, despite courts later suspending enforcement. Google and YouTube also face regulatory scrutiny over platform integration and network usage fees—even though Google’s infrastructure supports nearly 30 percent of Korea’s Internet traffic. Korea’s restrictions on exports of location-based data services, such as Google Maps, is a disadvantage to American companies trying to optimize their products globally. Netflix, too, has come under fire, with KFTC investigating its subscription-cancellation practices and signaling potential sanctions. These actions function as de facto tariffs, selectively burdening American tech while Chinese and domestic firms expand with less oversight.

Seoul should use this 90-day pause in tariffs as a diplomatic reprieve to signal to America its commitment to balanced and frictionless trade relations. This means taking a proactive approach and focusing on all trade barriers, particularly related to technology, not just tariffs. Despite the erratic implementation, the White House has consistently expressed its concerns about NTBs, as indicated on Liberation Day’s Executive Order, by referencing the conclusions of the latest National Trade Estimate Report on Foreign Trade Barriers, and by making public comments on the matter.

A good first step for Korea would be to align with U.S. standards on data governance and digital regulation, and demonstrate its reliability as an economic partner. Rep. Carol Miller’s (R-WV) reintroduction of the U.S.-Republic of Korea Digital Trade Enforcement Act—a law that would authorize trade restrictions if Korea imposes discriminatory digital competition regulations on U.S. firms—underscores the urgency of these reforms. In other words, if South Korea follows the trend of the “Brussels Effect” and passes legislation that either de jure or de facto targets American tech leaders, it risks formal designation as a bad-faith trade partner under U.S. law.

South Korea faces a strategic decision: Address persistent trade asymmetries, or risk straining its long-standing alliance with the United States and lose autonomy vis-à-vis China. What’s needed is a genuine reset—one grounded in open trade and closer coordination with Washington to counter mercantilist practices, particularly from China. This is no time for regulatory nationalism. American firms, especially in the tech sector, are increasingly facing steep compliance costs and legal uncertainty both in Korea and around the globe, while Chinese players like Temu and AliExpress—now exceeding 14 million monthly users in Korea—navigate the world’s markets with comparative ease. This double standard threatens not just bilateral trust, but Korea’s long-term competitiveness in the global digital economy.

Advertisement

Originally posted here

Low Tariffs Aren’t Enough: Korea Should Remove Its Trade Barriers With the United States
Regulatory barriers not tariffs now define US Korea trade tensions especially in digital sectors

Rodrigo Balbontin is an associate director at ITIF, specialising in trade, IP, and digital technology governance. With prior roles at The Asia Foundation, World Bank, and Chile’s Ministry of Finance, he brings deep expertise in innovation policy, digital economy, and international development. He also lectures on Southeast Asia’s digital landscape.

Business

Britain’s Strategic Recalibration: The UK-EU Reset and What It Means for Washington

Published

on

UK resets EU ties with new summit, boosting defense, trade, and US deal prospects

As of July 2025, the United Kingdom is entering a new era of pragmatic diplomacy with its European neighbors. On May 19, Prime Minister Keir Starmer hosted the first formal UK-European Union summit since Brexit, marking a decisive step away from the combative tone of recent years. While rejoining the EU remains off the table, the summit produced a series of significant agreements that reflect a broader strategic reset.

Rather than reversing Brexit, Starmer’s government is pursuing targeted re-engagement—focusing on shared interests in defense, trade, youth mobility, and climate coordination. The aim is clear: to restore Britain’s economic competitiveness and geopolitical relevance while respecting the boundaries set by the 2016 referendum.

This approach reflects both necessity and opportunity. On one hand, the UK continues to grapple with economic headwinds, including trade frictions and a shrinking labor pool. On the other, global challenges such as the war in Ukraine, climate volatility, and energy insecurity demand closer cooperation with European allies. Starmer’s vision is not to rewind Brexit—but to reshape its legacy into something more functional, stable, and globally connected.

The agreements from the summit speak volumes. The UK will now participate in EU-led defense programs and gain access to the €150 billion SAFE fund, supporting joint military research, procurement, and intelligence-sharing. This marks the most significant security convergence between Britain and the EU since Brexit.

On trade, a new veterinary agreement will streamline sanitary checks on food and agriculture, easing export headaches for UK businesses. And a 12-year fisheries deal, allowing limited EU access to UK waters, underscores the spirit of compromise at the heart of this new chapter.

Meanwhile, a youth mobility scheme will allow 18- to 30-year-olds to live and work in each other’s territories—an initiative welcomed by educators and employers alike. Negotiations are also underway to align emissions trading systems, boosting climate cooperation and price stability.

These moves are not about rejoining EU institutions, but about rebuilding influence and trust. By choosing functional integration over ideological isolation, Starmer is positioning Britain as a European stakeholder without forfeiting sovereignty.

But what does this mean for the United States? London’s stalled efforts to secure a comprehensive trade deal with Washington have long been hindered by regulatory divergence from the EU. If the UK selectively aligns with European standards—particularly in key sectors like digital trade, electric vehicles, and pharmaceuticals—it could become a more attractive, stable partner for U.S. investors and exporters.

Advertisement

This convergence might also create opportunities for youth exchanges, tech cooperation, and mutual recognition agreements between the UK and the U.S. Rather than limiting transatlantic ambitions, the EU reset may unlock new paths for engagement with Washington.

Critics at home are less convinced. Hardline Brexiteers warn that sectoral alignment erodes sovereignty. But for many in business, education, and defense, the benefits of stability and access outweigh the symbolism of separation.

The summit closed with a pledge for annual UK-EU meetings—a quiet but powerful signal that long-term partnership is back on the agenda. This isn’t Britain going backward. It’s Britain going forward—on its own terms, but not alone.

If managed well, this re-engagement could set the stage for a new type of transatlantic diplomacy. One not built on nostalgia, but on pragmatism and shared strategic interests.

Britain’s relationship with Europe is evolving. Its relationship with America could be next.

UK resets EU ties with new summit, boosting defense, trade, and US deal prospects
UK resets EU ties with new summit boosting defense trade and US deal prospects
Continue Reading

Business

Nigeria Pays Off IMF Debt, Faces Scrutiny Over Missing Funds

Published

on

Nigeria fully repays $3.4B IMF loan, but transparency concerns over fund usage persist

Nigeria has officially cleared its $3.4 billion emergency loan from the International Monetary Fund (IMF), marking a significant milestone in its economic recovery and fiscal responsibility. The IMF confirmed that the final repayment was completed on April 30, 2025, concluding a five-year loan cycle initiated during the COVID-19 pandemic.

In April 2020, amidst a global health crisis and plummeting oil prices that severely impacted Nigeria’s economy, the IMF extended a $3.4 billion loan under its Rapid Financing Instrument. This facility was designed to provide urgent financial assistance to countries facing balance of payments challenges without the need for a full-fledged program. The loan carried a low interest rate of 1% and was to be repaid over five years.

The repayment journey began earnestly in late 2023, with Nigeria disbursing \$401.73 million in the fourth quarter, followed by $409.35 million in the first quarter of 2024, and $404.24 million in the second quarter. By June 2024, the country’s debt to the IMF had reduced from $3.26 billion to $1.16 billion. The final installment was paid by April 30, 2025, effectively settling the debt.

Despite the completion of the principal repayments, Nigeria will continue to make annual payments of approximately $30 million in Special Drawing Rights (SDR) charges, as per IMF protocols. The successful repayment has been lauded by various stakeholders. The Tinubu Media Volunteers (TMV) commended President Bola Ahmed Tinubu’s administration for its commitment to meeting international obligations, highlighting the financial re-engineering that facilitated the timely repayments.

However, the journey was not without controversy. In early 2024, the Socio-Economic Rights and Accountability Project (SERAP) filed a lawsuit against President Tinubu over allegations that the $3.4 billion loan was missing, diverted, or unaccounted for. These allegations were based on the 2020 annual audited report by the Auditor-General of the Federation, which suggested a lack of documentation on the movement and spending of the IMF loan.l

SERAP urged the government to investigate these claims, prosecute those responsible, and recover any missing funds. The organization emphasized that servicing IMF loans allegedly missing or unaccounted for constitutes a double jeopardy for Nigerians, potentially exacerbating the country’s debt burden.

In response to the loan approval in 2020, the Nigerian government had assured the IMF of its commitment to transparency and accountability. Measures included publishing procurement plans and notices for all emergency-response activities, as well as undertaking an independent audit of crisis-mitigation spending. As Nigeria turns a new page in its economic narrative, the successful repayment of the IMF loan stands as a testament to its resilience and commitment to fiscal responsibility. However, the lingering allegations of mismanagement underscore the need for continued vigilance and transparency in public financial management.

Nigeria fully repays .4B IMF loan, but transparency concerns over fund usage persist
Nigeria fully repays $34B IMF loan but transparency concerns over fund usage persist
Continue Reading

Business

Scoop of Dissent: Ben & Jerry’s Co-Founder Disrupts Senate Over Gaza

Ben & Jerry’s co-founder Ben Cohen arrested protesting U.S. bomb funding for Gaza conflict

Published

on

Ben & Jerry’s co-founder Ben Cohen arrested protesting U.S. bomb funding for Gaza conflict

On May 14, 2025, Ben Cohen, co-founder of Ben & Jerry’s, was arrested during a U.S. Senate Health, Education, Labor and Pensions Committee hearing. The session, which featured Health and Human Services Secretary Robert F. Kennedy Jr., was disrupted by Cohen and several other protesters who voiced opposition to U.S. involvement in the Gaza conflict.

As Kennedy Jr. was testifying, Cohen stood up and shouted, “Congress pays for bombs to kill children in Gaza,” accusing lawmakers of prioritizing military spending over domestic welfare programs like Medicaid. The Capitol Police swiftly intervened, removing Cohen and six other demonstrators from the room. Cohen was charged with a misdemeanor under a Washington, D.C. statute that prohibits “crowding, obstructing or incommoding,” which is commonly applied in cases of nonviolent protests. If convicted, he faces a potential sentence of up to 90 days in jail, a $500 fine, or both.

In an interview following his release, Cohen expressed his frustration with U.S. foreign policy, stating, “It got to a point where we had to do something.”

He criticized the approval of $20 billion worth of bombs for Israel, arguing that such expenditures come at the expense of domestic programs that support American children.

Cohen’s protest aligns with Ben & Jerry’s longstanding tradition of political activism. In 2021, the company halted sales in Israeli-occupied Palestinian territories, citing its commitment to social justice. Additionally, in March 2024, Ben & Jerry’s filed a lawsuit alleging that its parent company, Unilever, had removed its CEO, David Stever, in retaliation for the brand’s progressive stances, including its support for Palestinian rights.

The incident has sparked widespread attention and debate over the U.S. government’s role in the Gaza conflict and the allocation of federal resources. Cohen’s arrest underscores the ongoing tensions between political activism and governmental policies, highlighting the challenges faced by individuals and organizations advocating for change in the current political climate.

Ben Jerrys co founder Ben Cohen arrested protesting US bomb funding for Gaza conflict
Continue Reading

Trending