Business Leaders Mobilize for US Delegation...Protect Core Technologies While Securing Practical Gains

The transfer of shipbuilding technology is inevitable...Protecting core assets is essential
Business community: "We must gain as much as we invest"
Additional support needed, such as selective tariff exemptions for intermediate goods
Automotive industry: "Final negotiations to ensure implementation of the 15% tariff agreement"

With the upcoming Korea-US summit scheduled for the 25th, protecting next-generation core technologies in the shipbuilding industry and securing tariff benefits linked to US investments are expected to become the top priorities for both the government and the business community. Within the industry, there are significant concerns that the MASGA (Make American Shipbuilding Great Again) project could lead to the outflow of technologies that form the foundation of Korea's competitiveness. However, some analysts believe that selective technology transfer, as long as it does not involve core technologies, could yield practical benefits.

According to the business community on August 20, it is highly likely that the economic delegation visiting the US will include Samsung Electronics Chairman Lee Jae-yong, SK Group (Korea Chamber of Commerce and Industry Chairman) Chairman Chey Tae-won, Hyundai Motor Group Chairman Chung Eui-sun, LG Group Chairman Koo Kwang-mo, as well as Hanwha Group Vice Chairman Kim Dong-kwan and HD Hyundai President Chung Ki-sun, who are directly involved in the MASGA project. The delegation is being coordinated by the Korea Enterprises Federation, and it is reported that Ryu Jin, Chairman of the Federation and Poongsan Group, will also join the trip.

The business community expects this US visit to serve as the 'final negotiation' to secure detailed coordination on tariff negotiations and guarantees for US investments. In particular, since the negotiation dynamics could change depending on the intentions of US President Donald Trump, analysts stress the importance of the ability to respond quickly to unexpected situations on the ground.

The Key to Moving the US...Protecting Core Technologies Is Crucial

During the tariff negotiations, the government presented an investment plan worth $350 billion, of which $150 billion is allocated to shipbuilding cooperation. This is not a single project, but a package-type cooperation covering various fields such as technology collaboration, maintenance, repair and operations (MRO), and support for the development of liquefied natural gas (LNG) carriers. The government and industry have narrowed down the scope of final cooperation to seven agenda items and have recently coordinated specific investment allocations for each item.

The most sensitive issue is technology transfer, particularly know-how in LNG carrier construction and shipyard production management technologies. Experience in building production management systems (PMS) and process optimization technologies are considered the backbone of domestic shipyards' competitiveness.

An industry official said, "While patents may be held overseas, much of the actual design and construction expertise resides in domestic shipyards. The sensitivity of the negotiations will depend on which technologies are included for transfer." There are also concerns that MRO could involve not only maintenance support but also the transfer of process operation methods and automation systems.

Business Community: "Highlight Investments to Secure Policy Support and Guarantees"

The business community shares the view that while core technologies must be protected, tangible benefits must also be secured. It is not enough to simply provide capital; real returns such as tariff benefits, incentives, and policy guarantees must be obtained.

Lee Tae-kyu, Senior Research Fellow at the Korea Economic Research Institute, stated, "During shipbuilding cooperation, Korea can demand selective tariff exemptions for intermediate goods that must be exported to the US, and these exemptions must be linked to our investments." He added, "Not only in shipbuilding but also in semiconductors and automobiles, highlighting large-scale investments by companies can help secure tariff exemptions for intermediate goods needed for local production, which would further stimulate investment."

For example, in shipbuilding, thick steel plates and special equipment required for vessel construction are considered intermediate goods. In the semiconductor sector, equipment parts and wafer materials are essential, while in the automotive industry, battery cells, motors, and body parts are key intermediate goods. Ultimately, since Korea is providing shipbuilding technologies and facilities, there is a strong case for the US to reciprocate with additional selective tariff benefits, creating a mutually beneficial exchange structure.

A case in point for securing practical benefits by transferring non-strategic technologies or assets is Hyundai Motor Group (Hyundai Mobis), which previously supplied core electric vehicle components to Volkswagen and secured 5 trillion won in return. Lee Tae-kyu noted, "Hyundai Motor was able to take the next step as a result of this deal. Similarly, if the shipbuilding industry transfers some technologies without losing competitiveness, the US, which is relatively less capable, would welcome it."

Automotive Tariff Implementation Stalled..."Trump's Signature Needed"

The automotive industry also insists that the current US visit must definitively resolve 'tariff uncertainty.' Although Korea and the US agreed at the end of last month to lower tariffs on automobiles and related parts from 25% to 15%, President Trump has yet to sign the executive order to implement the agreement, so the industry is still subject to the 25% tariff.

Some argue that the principle of zero tariffs under the Korea-US Free Trade Agreement (FTA) should be reaffirmed. While US-made cars are still imported into Korea tariff-free, vehicles from the European Union (EU) and Japan have seen their tariffs adjusted from the previous 2.5% to 15%, eliminating Korea's unique FTA advantage. Lee Hang-gu, Research Fellow at the Korea Automotive Technology Institute, said, "Since the FTA has not been completely abolished, Korea should demand that tariffs on Korean-made cars be reduced to 12.5%."

Some also suggest that this US visit should be used as an opportunity to foster cooperation in the automotive industry, citing the joint development partnership between Hyundai Motor and General Motors (GM) as an example. An industry official in the parts sector commented, "As the US seeks to replace its supply chain from China, Korean companies should demand support to help them establish a foothold in the local market."

This content was produced with the assistance of AI translation services.