South Korea’s Coupang Crackdown Risks a Bilateral Crisis
President Trump’s announcement that tariffs on South Korean goods will be increased from 15% to 25% comes as no surprise.
Last November, the President mandated that South Korea not discriminate against American businesses. Unfortunately, the mandate has been blatantly violated with South Korea’s treatment of American e-commerce giant Coupang.
Coupang is a Fortune 150 U.S. technology company and a major channel for billions of dollars in U.S. exports to South Korea.
So why has the company been targeted? Here’s your answer.
Last year, Coupang made headlines due to a low-security data leak. The leak involved a former Coupang employee who stole authentication keys to access low-grade personal customer data. The data was never published externally. No financial information or passwords were exposed and there’s no evidence of fraud, identity theft, or secondary crimes. Yet the South Korean government appears committed to inflicting maximum damage on Coupang.
The difference is night and day compared to how the South Korean government handled the SK Telecom (SKT) data breach in 2025. That breach exposed far more sensitive information and involved confirmed statutory violations.
Sadly, the South Korean government has directed 14 different government ministries and agencies to “bankrupt” Coupang, including regulatory and law-enforcement actions unrelated to the breach itself. Since then, authorities have blocked routine business deals and have openly talked about forcing the company out of business. Now, they’re even threatening to arrest Harold Rogers – an American citizen serving as interim CEO of Coupang’s subsidiary – and slap him with travel restrictions.
The disproportionate response against Coupang has not gone unnoticed in Washington, D.C. The president’s announcement followed outcry from key lawmakers such as House Judiciary Committee Chairman Jim Jordan.
It’s a shame it has come to this.
The South Korea-U.S. Alliance is one of the most consequential partnerships in modern international relations. South Korea hosts nearly 30,000 U.S. troops and is the sixth largest U.S. trading partner. The relationship has long been built on shared commitments to the rule of law, market access, and mutual trust.
But even strong alliances can be weakened when commitments are tested. Many policymakers across the Trump administration and Capitol Hill view the Coupang data incident as a pretext for South Korea’s efforts to advance long-standing political and regulatory agendas, particularly around digital regulation.
It’s no surprise that South Korea’s Trade Minister, Yeo Han-Koo, arrived in early January attempting to reassure U.S. officials about South Korea’s treatment of American companies – just days before the U.S. House of Representatives held a hearing on foreign non-tariff barriers. That hearing featured bipartisan criticism of South Korea’s trade practices and specifically referenced the Coupang case on several occasions.
Prime Minister Kim Min-seok’s subsequent visit to Washington for meetings with Vice President JD Vance and members of Congress appeared to be another diplomatic Hail Mary to alleviate bilateral tensions.
Notably, the Coupang dispute isn’t happening in a vacuum. President Trump has made fair and reciprocal trade, including in digital markets, a central pillar of his America First policy. Against that backdrop, South Korea’s escalating pressure on a prominent U.S. firm sends precisely the wrong signal.
South Korean leaders should be seeking to lower the temperature on Coupang. Instead, they’re doing the opposite.
South Korea is too important a regional and international partner for this dispute to spiral into a bilateral crisis. There are signs of an increased partnership between both nations, including a $350 billion commitment designed to strengthen economic and security ties. That progress should not be jeopardized by a politicized regulatory campaign against a single company.
How South Korea handles this matter will send a powerful signal to American investors, policymakers, and allies about whether South Korea remains a predictable, rules-based partner. For an alliance that depends on economic trust and military cooperation, that signal will matter far beyond this single case.