The emphasis on cooperation between government and business

President Lee Jae-myung met on Aug. 19 with the heads of South Korea’s four largest conglomerates and leaders of business associations at the presidential office in Yongsan, Seoul. The session functioned as a preparatory workshop for the South Korea-U.S. summit with U.S. President Donald Trump scheduled for Aug. 25. Lee emphasized the need for a “one-team spirit,” saying the government and companies are struggling with changing export conditions but should work together to turn the crisis into an opportunity.

Late last month, South Korea’s negotiating team struck a deal in the United States that set reciprocal tariff rates at 15 percent, launched a $150 billion “MASGA (Make American Shipbuilding Great Again)” project, and committed to a total of $350 billion in U.S.-bound investments, or about 486 trillion won. Additional investments by Korean companies are expected to be disclosed at the upcoming summit. The government cannot address these issues without support from major firms in semiconductors, automobiles, secondary batteries, shipbuilding, steel, and biotechnology. Trump’s tendency to make unexpected demands even in top-level meetings underscores the need for detailed rehearsals between officials and business leaders.

Corporate cooperation is crucial in addressing the “security bill” Trump is expected to raise, including pressure to boost defense spending. South Korea’s defense budget accounts for about 2.3 percent of GDP, while the United States is demanding an increase to 5 percent. Tying U.S. investments in MASGA, advanced industry research and development, and M&A costs to higher defense spending will also require close coordination with companies.

Large corporations remain the government’s main pillar of support in helping smaller firms hurt by higher tariffs that restrict exports to the United States and in tackling stagnant youth employment. At the meeting, Samsung Electronics Chairman Lee Jae-yong said, “In addition to investments in the United States, we will continue related investments at home so that quality jobs are consistently created and high value-added industries can grow.”

Against this backdrop, the ruling party’s push to pass the so-called Yellow Envelope Act and a tougher Commercial Act in the National Assembly is weighing on large corporations as heavily as the reshaping of global trade. If these disputed bills pass, disrupting the balance of labor relations and heightening management uncertainty, companies will have less resilience to withstand the tariff war and economic downturn. Now, when government and business must move as one with a one-team spirit, is no time to shackle companies.