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The nationality of capital and the nationality of entrepreneurs

Published: 20 Jan. 2026, 00:02

Suh Kyoung-ho

The author is an editorial writer at the JoongAng Ilbo.

Foreign direct investment (FDI) into Korea totaled $36.05 billion last year, according to figures released by the Ministry of Trade, Industry and Energy earlier this year. Based on reported commitments, it marked the largest inflow on record. Where capital flows in, however, it also flows out. Outbound foreign direct investment by Korean entities, tracked as overseas direct investment by the Ministry of Economy and Finance, reached $47.36 billion in the first three quarters alone. On an annual basis, the total is likely to be roughly in line with the previous year’s level of $63.95 billion.

A view of a Samsung Electronics semiconductor plant under construction in Taylor, Texas, from February 2025 [SAMSUNG ELECTRONICS]

This reflects continued investment by Korean companies in advanced industries such as semiconductors and batteries in the United States, as well as overseas real estate and alternative asset investments by the National Pension Service. In many recent years, outbound FDI has exceeded inbound FDI by more than two to one. That Korea now invests more abroad than it receives is not new. It is a natural outcome of Korean firms’ expanding global operations and has been a sustained trend since the early to mid-2000s.

The concern is that the erratic pressure tactics of U.S. President Donald Trump, who styles himself the “tariff king,” could give rise to investments that are no longer economically natural. Excessive investment by Korean companies in the United States risks weakening the domestic production base and shrinking jobs at home. Even the pledged $20 billion a year in U.S. investment made to conclude tariff negotiations is a heavy burden. There is growing anxiety that Washington may further pressure Korean firms to expand U.S. investment by wielding semiconductor tariffs as leverage.

Korean companies already operate or are building semiconductor foundries and packaging plants in the United States, but there are no memory chip manufacturing facilities. Core memory semiconductor processes require thousands of materials and components, making it essential for suppliers to cluster together. That is why these key processes remain based in Korea. Against this backdrop, remarks by U.S. Commerce Secretary Howard Lutnick, which explicitly mentioned memory investment, are widely interpreted as open pressure to localize memory production. This must not happen.

It is no coincidence that the British weekly The Economist recently ran a cover story on the “return of gunboat capitalism.” Just as Western powers in the 18th century practiced coercive diplomacy backed by cannon-armed warships, states today are once again strong-arming multinational corporations. The result has been declining corporate profits and reduced efficiency. Multinationals that exited China and Russia due to tariffs, subsidies and export controls have returned to their home countries. In 2016, 44 percent of U.S. multinational capital expenditure was made domestically. That figure has now risen to 69 percent.

Global management strategies aimed at maximizing profits have proved unable to overcome the barriers of geopolitics and supply chains. Shareholder returns have fallen and consumers are paying higher prices. Trump is fixated on oil and natural resources, yet largely indifferent to innovation and intangible capital. The Economist, a staunch defender of market principles, is pessimistic about the future of gunboat capitalism. “Governments create rents, rents distort markets and distorted markets impoverish nations and push societies backward,” the magazine warned.

A photo posted on social media by U.S. President Donald Trump on Jan. 16 accompanied by the words “Tariff King.” [TRUTH SOCIAL CAPTURE]

The notion that transnational capital, embodied by multinational corporations, dominates governments briefly gained traction in the 1980s. In the Trump era, however, multinational firms are more like mice before a cat. This is not a call for moralizing in a realist international order where power defines justice, reminiscent of a gangster-ruled back alley. After the 1997 Asian financial crisis, Korean society learned the so-called global standard and corrected its skewed view of foreign capital. The conclusion was that the nationality of capital mattered less than whether investment, foreign or domestic, created businesses and jobs at home. Challenging the reflexive bias in favor of domestic capital had its value.

Recent experiences, including the recent Coupang data leak controversy, have complicated that view. Some foreign capital can be uncomfortable to bear and seems to test the limits of public patience. Capital may be stateless, but entrepreneurs clearly have nationalities. In the end, the only entity that can reliably look after Korean companies is the Korean government. With firms already under pressure from abroad, it would be unwise to make their lives harder at home as well. Trump’s second administration has only just passed its first year.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.