SEOUL, South Korea — In November, President Donald Trump and South Korean Lee Jae-myung announced, in a celebratory tone, an agreement considered historic in investment and security, promising to inaugurate a “new phase” in the more than 70-year-old alliance between the two countries. Six months later, the honeymoon atmosphere gave way to impasse.
At the center of the confusion is an unlikely target: Coupang, often called the “Amazon of South Korea,” and its founder, Korean-American Bom Kim.
The case began with a data leak last year that affected 33 million customer accounts in the country. The investigation opened by regulators quickly stopped being a domestic issue and became a test of the relationship with Washington, because Coupang — Korea’s largest online retailer — is legally an American company, incorporated in the USA.
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The company went on to accuse the Seoul government of using regulation as a weapon against a US company and sought support in Washington, claiming that American groups were being treated worse than Chinese competitors. South Korean authorities counter, saying that everything follows “due process”.
Last month, 54 Republican lawmakers sent a letter to South Korea’s ambassador in Washington saying the “targeted and discriminatory” treatment of Coupang and other U.S. technology companies threatens the country’s economic and security interests.
“If your administration’s efforts to push American companies out of the online retail market are successful, the vacuum will quickly be filled by Chinese platforms like Temu, Alibaba and Shein,” they wrote. “Their dominance in the region would have unacceptable security consequences.”
At her Senate confirmation hearing on Wednesday, Michelle Steel — nominated by Trump to be US ambassador to Seoul — was asked about the topic. She said the November agreement prohibits this type of discrimination.
“I will follow this very clearly,” he said.
Seoul’s response came in kind.
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“This is a clear case of interference in internal affairs and is unacceptable,” said Woo Won-shik, president of the National Assembly, referring to the letter from American congressmen. Dozens of South Korean parliamentarians signed another letter, addressed to the US embassy, in which they state that Washington’s pressure “puts into doubt the very integrity and foundations of the alliance”.
Meanwhile, the most flashy promises of the agreement between Lee and Trump are slipping away. There is no sign, for now, of the “hundreds of billions of dollars” that Korea had committed to investing in American shipyards and other sectors. And conversations about US support for the country to develop nuclear-powered submarines have barely gotten off the ground. Lee’s national security advisor, Wi Sung‑lac, even publicly stated that “the Coupang problem is affecting security consultations.”
In the eye of the storm is Bom Kim, who created Coupang in 2010, in South Korea, where he was born. “Rocket Delivery” trucks are part of everyday life in Korean cities, and, for the local public, the company is seen as a national business — after all, that is where most of the revenue is. Coupang itself, however, insists on presenting itself as an American company.
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The crisis exploded after the data leak, which began in June and was only detected in November. According to the company, it cooperated fully with the investigation, tracking a former employee to China and recovering the laptop used in the invasion from the bottom of a creek.
Coupang apologized several times. The president of the local subsidiary resigned and was replaced by an American executive, Harold Rogers.
But in Korea’s hierarchical culture, the expectation was that the “real boss” would take responsibility — in this case, Bom Kim, CEO of the US-listed holding company. When he finally issued a note of apology on December 28, accompanied by an offer of $1.1 billion in coupons from Coupang itself, the gesture was seen as late and insufficient.
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“He remains in the shadows, in quotation marks, placing at the forefront the American representative who does not even speak the language, in the literal and figurative sense”, criticized Junghee Cho, partner at the D.Code Law Group firm. “It gives the feeling that the company wants to avoid responsibility.”
(Kim, who emigrated to the U.S. at a young age, often gives interviews and conference calls with investors in English. But the apology was written in Korean.)
South Korean regulators, who deny any bias against American companies, had already opened investigations into alleged competition violations, tax problems and working conditions at Coupang. Kim picked a fight with Parliament by refusing invitations to testify at a public hearing.
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For many in Seoul, the Coupang case is a symptom of a deeper erosion in the perception of the alliance with Washington. A growing segment of the population sees the relationship as asymmetrical, or even predatory, especially under the Trump administration.
According to Seong-Hyon Lee, an expert on Korea at the George HW Bush Foundation for US-China Relations, American conservative groups began to use the episode — in addition to the Lee government’s operations against churches accused of corruption and the interest in dialogue with North Korea — as proof that Seoul was moving away from “American values”. “Hence come the accusations that the government is ‘pro-North Korea’ or ‘pro-China’,” he said.
“Although the Lee administration has made real efforts to reinforce the alliance with Washington,” he concluded, “some critics insist on viewing Korea through a decades-old ideological filter.”
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