Home > Business > Economy

Negotiations over tariffs, Alaska LNG project to begin next week, U.S. treasury secretary says

Published: 17 Apr. 2025, 09:25

Model of LNG tanker is seen in front of the U.S. flag in this illustration taken on May 19, 2022. [REUTERS/YONHAP]

As U.S. Treasury Secretary Scott Bessent announced on Monday plans to begin trade negotiations with Korea next week, Seoul finds itself in a complex position — recognized as a high-priority negotiation partner, yet pressured by a tight timeline and the possibility of a high-stakes “package deal” that links tariffs with defense costs.

Officials in Seoul welcomed the recognition of priority negotiation status under acting President Han Duck-soo’s administration. However, the talks must be concluded within a 90-day grace period, and if Washington pushes to connect the issues of national security, tariffs and military cost-sharing into a single package, the difficulty level of the negotiations could rise significantly.

At the center of the talks is a proposed “one-stop shopping deal” that bundles trade and security issues. The U.S. wants Korea to invest in a $39 billion to $44 billion Alaska liquefied natural gas (LNG) project, which includes a 1,300-kilometer (808-mile) pipeline and liquefaction facilities.

In exchange, Korea would receive a long-term LNG supply and potential tariff reductions.

From left, Glenfarne Group CEO Brendan Duval, James Kim, chairman and CEO of the American Chamber of Commerce in Korea (Amcham), Alaska Gov. Mike Dunleavy and Alaska Gasline Development Corporation President Frank Richards at the luncheon in central Seoul’s Four Seasons Hotel Seoul on March 25.

Korea views LNG purchases as low-risk and beneficial for energy diversification and trade balance. But investment in the infrastructure poses financial and logistic challenges, especially given the harsh Arctic conditions.

Taiwan has already signed a letter of intent to invest, increasing pressure on Seoul to respond.

An insider well-versed in the matter, who requested anonymity, told the JoongAng Ilbo, an affiliate of the Korea JoongAng Daily, on Tuesday, that acting president, “who takes pride in his trade expertise, is showing strong will to produce visible outcomes with the Trump administration.”

Han’s phone call with President Donald Trump on April 8 reportedly played a key role. During the call, Han proposed a “shopping list” that included cooperation in shipbuilding, large-scale purchases of U.S. LNG and a joint Alaska gas pipeline project — proposals that aligned with Trump’s interests.

Acting President Han Duck-soo, left, and U.S. President Donald Trump are pictured in this combined image. [YONHAP]

Trump responded the next day, saying the two sides had the framework and momentum for a promising deal.

Korea’s inclusion as one of the five “top targets” — alongside Japan, Britain, Australia and India — could reduce some pressure.

Seoul’s delegation, led by Minister of Trade, Industry and Energy Ahn Duk-geun, will lead the talks. A key agenda item will be the Alaska LNG project. Working-level video calls are already underway this week, and Vice Minister Choi Nam-ho is reportedly considering a trip to Alaska to assess the project.

Trump has signaled support for what he calls a “one-stop shopping” deal that could link tariffs to defense cost-sharing and energy investment.

“It would be nice to wrap it all up in one package for each country,” he said on April 9. “You know, it’s nice and clean.”

Diplomatic officials argue that if Korea is bound to face defense cost hikes, bundling the issue into a broader deal — as Trump proposed — may be the most pragmatic approach.

“Trump’s style is to put everything on the table at once, even issues unrelated to trade, and try to negotiate them as a single package,” said Kim Jae-cheon, a professor at Sogang University’s Graduate School of International Studies. “So even if Korea tries to separate each issue, it won’t work.”

“Since it’s ultimately difficult to avoid a defense cost hike, we should take a proactive approach by negotiating early — perhaps investing in the modernization of U.S. tactical nuclear weapons — and in return, seek stronger nuclear defense capabilities and other forward-looking outcomes.”

Some analysts also argue that Korea should accept what’s unavoidable and focus on maximizing returns.

“In the current situation, Korea doesn’t have many cards to push for tariff cuts beyond a defense cost increase,” said Lee Byung-chul, a professor at Kyungnam University’s Institute for Far Eastern Studies. “We need to be bold — give up big and get big in return.”

Within the government, caution prevails. Trade officials say they will watch how the United States handles talks with Japan and Taiwan and consider joint investment options to spread risk.

Finance Minister Choi Sang-mok said Tuesday that defense cost-sharing “is not part of the current negotiating agenda,” though he acknowledged U.S. interest in the issue.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY KIM WON, PARK HYUN-JU [[email protected][