The US-Korea alliance has benefited both countries enormously for more than 70 years. But bilateral relations still have work to do, and both governments know it. Trade and economic negotiations that should have concluded long ago remain unfinished. Some frictions that once seemed manageable have hardened into genuine irritants. Officials on both sides speak of partnership, but a handful of unresolved disputes are still testing that trust.
None of this is irreversible. US President Donald Trump’s recent signals of interest in a fall meeting with Kim Jong-un — potentially on the sidelines of the November APEC summit in China — have created new urgency and new opportunity. Strengthening the US-South Korea partnership, resolving lingering frictions and demonstrating reciprocity are now prerequisites for successful personal diplomacy with Pyongyang and for a more robust Indo-Pacific strategy.
This is a moment of opportunity for South Korea. President Lee Jae Myung's government has, at least by some metrics, delivered stronger cooperation than many in Washington anticipated.
South Korea raised its 2026 defense budget by 7.5 percent and added another $1 billion in support for the 28,500 US troops stationed there. Major shipbuilding agreements between the two countries are expected to expand US Navy capacity and American firms stand to win large contracts supporting South Korea's first nuclear-powered submarines and its civilian nuclear program.
But building on that momentum requires resolving the lingering economic frictions impacting US companies in the Korean market. Doing so is essential to strengthening the alliance and advancing a more robust Indo-Pacific strategy.
One critically important matter is the ongoing regulatory dispute involving the US e-commerce firm Coupang. How it is handled will say something about whether reciprocity — American companies in Korea treated on par with Korean companies in America — is a real principle or just a talking point.
Coupang is seen by many as a Korean-American success story that exemplifies the best aspects of a strong US-South Korea alliance. For much of the past decade, Coupang has been the largest source of American investment into Korea, devoting many billions of dollars to build an artificial intelligence-driven logistics infrastructure that serves Korean customers with lightning-fast deliveries.
These US investment dollars have produced significant economic growth throughout Korea and created more than 100,000 local jobs. Coupang has also become an export engine for American goods and agricultural products sold in Korea — more than $5.4 billion worth last year — and has enabled Korean goods to reach overseas markets like Taiwan.
Even as Seoul cooperates closely on defense and trade, this dispute runs counter to that record. The regulatory response to a data incident at Coupang last year has done real damage to the bilateral relationship, with little upside for Korea.
Some public statements by Korean officials — describing the company in unusually harsh terms and questioning whether it should continue operating in the Korean market — went further than the underlying facts supported and unsettled many US officials across the Trump administration and throughout the US Congress committed to the bilateral economic partnership.
The scale of the incident itself has also been described in terms that outpaced the facts as they later emerged. The perpetrator accessed servers holding tens of millions of low-sensitivity records — something Coupang acknowledged from the outset — but cybersecurity analysis found that only around 3,000 records were actually taken, and those were recovered without evident harm.
A Blue House meeting in December 2025 directed more than a dozen agencies to initiate over 40 investigations and enforcement actions — producing record fines and, in the view of many observers, disrupting the company's operations, including the destruction of more than $30 billion in shareholder value. This was read in Washington as a sign that South Korean regulators were singling out a major American company rather than applying rules evenhandedly. That perception, whether or not it was the government's intent, has already drawn attention from US Vice President JD Vance, Secretary of State Marco Rubio and Trade Representative Jamieson Greer, as well as a damning July 1 report from the US House Judiciary Committee.
None of this needs to become a lasting sore point.
Just as Washington adjusted course in September 2025 after Seoul raised concerns about aggressive American enforcement against Korean companies, Seoul now has a straightforward opportunity to do the same: Bring the Coupang matter to a favorable resolution, reaffirm that Korea does not intend to pursue "online platform" legislation that would functionally single out a sector where US firms lead and ensure the Korea Fair Trade Commission applies procedural fairness consistently to foreign and domestic firms alike. These are modest, low-cost steps that would remove a genuine irritant without asking Seoul to abandon any legitimate regulatory interest.
The clock, though, is not on Seoul's side.
Trump's decision in August to scale back the Ulchi Freedom Shield exercise demonstrates how quickly unresolved disagreements can affect even long-standing pillars of the alliance.
With US diplomacy toward Pyongyang potentially accelerating, Seoul has a tight window to demonstrate good faith by favorably resolving the Coupang matter. Paired with the defense, trade and diplomatic steps already underway, a favorable resolution of the Coupang matter would remove one of the most consequential irritants clouding the alliance just as it needs to present a united front.
This would help turn Coupang back into what it should be: a symbol of successful Korean-American economic partnership, backing up an alliance that is, on the whole, moving in the right direction.
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Fred Fleitz
Fred Fleitz is the former chief of staff of the Trump National Security Council and author of “North Korea, Nuclear Brinkmanship and the Oval Office.” The views expressed here are the writer’s own. — Ed.
khnews@heraldcorp.com
