South Korea launches $2.4 bn US investment as Trump pushes for Alaska LNG deal

South Korea has moved forward with the initial $2.4 billion tranche of its $350 billion investment commitment to the United States, directing the money to a combined-cycle gas plant in Encinal, Texas that will power AI data centers. The payment is intended to cement the bilateral economic partnership and preserve the 15 percent tariff ceiling on Korean exports. Nevertheless, President Donald Trump has escalated rhetoric, urging Seoul to join a $54 billion Alaska LNG pipeline and threatening to double tariffs if it refuses, using the issue in his upcoming midterm election campaign.

At the same time, the Office of the U.S. Trade Representative is close to releasing findings from a Section 301 probe into industrial overcapacity that could trigger additional duties on Korean semiconductors, EV batteries, cars and steel. Korean officials fear any new tariffs would breach the agreed ceiling, while the Ministry of Trade, Industry and Resources faces a parliamentary audit to examine the financial soundness of the US projects. Opposition parties accuse the Lee Jae Myung administration of hasty commitments under U.S. pressure, and analysts say Seoul must coordinate a strong domestic response to preserve bargaining power.