U.S. urges LNG investment ahead of tariff hike

The Donald Trump administration last month asked the South Korean government to invest in a liquefied natural gas terminal project in Louisiana before U.S. President Donald Trump announced plans to raise tariffs on South Korea to 25 percent, according to government sources. Concerns are mounting that Washington could intensify pressure on Seoul to follow through on South Korea-U.S. investment commitments after Japan, whose investment framework is similar to South Korea’s, unveiled its first U.S.-bound investment projects Monday local time.

A government source said Wednesday that the United States requested investment tied to the Louisiana LNG project before Trump posted on Truth Social on Jan. 26 that he would raise tariffs on South Korea to 25 percent. The project calls for construction of large-scale export infrastructure along the Gulf Coast, home to a concentration of U.S. refining facilities, to ship American-produced LNG worldwide. The Trump administration approved a sweeping expansion of the facilities shortly after taking office.

In addition to the Louisiana LNG terminal, Washington is said to have proposed several energy-related initiatives during bilateral consultations aimed at meeting surging electricity demand in advanced industries. In a joint fact sheet released in November, the two sides said, “The leaders welcome South Korean investment to advance economic and national security interests across a wide range of sectors, including but not limited to shipbuilding, energy, semiconductors, pharmaceuticals, critical minerals, artificial intelligence and quantum computing.”

The South Korean government is understood to have told Washington that it is difficult to formally discuss investment in the Louisiana LNG terminal because a special bill required for the project has yet to pass the National Assembly. However, concerns are mounting that pressure from the United States could intensify after Washington said it would publish a notice in the Federal Register to immediately impose the higher tariffs and completed the selection of Japan’s U.S.-bound investment projects.

A working-level negotiation team led by Park Jung-sung, deputy minister for trade at the Ministry of Trade, Industry and Energy, was dispatched to the United States on Tuesday. The delegation is expected to discuss with U.S. counterparts previously proposed investment candidates, their commercial feasibility and related implementation procedures.


Kyu-Jin Shin newjin@donga.com