US President Donald Trump has warned that foreign companies failing to build manufacturing facilities in the United States could face tariffs as high as 300%, reiterating his administration’s tough stance on trade and investment ahead of the November midterm elections. Speaking at a campaign rally in Vandalia, Ohio, on Saturday, Trump emphasized tariffs and foreign investment commitments as cornerstones of his economic agenda, citing them as factors driving increased US manufacturing.
Among the countries singled out during his remarks were South Korea, China, Japan, and Canada. Trump stated that overseas companies would have approximately 18 months to establish plants in the US before tariffs ranging between 150% and 300% might be imposed.
Trump’s comments come amid escalating tensions between Washington and Seoul over the implementation of South Korea’s US$350 billion investment pledge tied to a bilateral trade agreement signed last year. Under the deal, South Korea agreed to reduce tariffs on its goods entering the US from 25% to 15%, in exchange for a multibillion-dollar investment commitment. This package includes US$150 billion focused on shipbuilding cooperation and US$200 billion earmarked for strategic investments.
A recent point of contention involves the Alaska liquefied natural gas (LNG) project. Trump has publicly incorporated South Korean participation in the Alaska LNG initiative as part of the strategic investment segment of the agreement. However, South Korean officials maintain that they have only agreed to begin exploratory discussions and have not reached a final decision on the extent or nature of their investment.
Responding to accusations that he prematurely announced South Korea’s involvement, Trump defended his position, stating, “I didn’t jump the gun. I mean, they were there and they were represented.” He further indicated that if South Korea opts out, the US would respond with higher tariffs.
Seoul’s hesitancy stems largely from concerns over the project’s commercial viability. The lead developer, Glenfarne Group, has estimated the total cost of the Alaska LNG project could range between US$44.5 billion and US$54.5 billion. Analysts note that its cost per unit of annual production capacity may be more than double that of comparable US Gulf Coast LNG ventures. The project entails constructing a 1,287-kilometer pipeline from Alaska’s North Slope to Nikiski, along with a gas processing plant and a liquefaction terminal.
South Korean President Lee Jae Myung has acknowledged that commercial feasibility, including the distribution of returns and mitigation of losses from potential unprofitable ventures, remains a critical sticking point in talks with the Biden administration. Seoul has pushed to include clauses requiring investments to meet “commercially reasonable” standards. Industry Minister Kim Jung-kwan reiterated that South Korea should avoid funding projects lacking commercial justification, while conceding that withdrawing from commitments could trigger renewed tariff pressures.
The first confirmed project under the strategic investment pact is a gas-fired power plant in Encinal, Texas. In addition, discussions are ongoing regarding the potential construction of eight large nuclear reactors, though South Korean officials emphasize that these would require further evaluation before final investment commitments are made.