Korea pushes China-free supply chains with new US investments
Corporate Korea is closely monitoring the new Lee Jae Myung administration's diplomatic maneuvers, particularly how Seoul will go about bolstering its economic partnership with Washington DC amid the ongoing US-China trade spat.
A meeting between the Korean and US presidents did not take place as planned on the sidelines of the G7 summit in Canada this week, as US President Donald Trump returned to America earlier than scheduled. However, political and diplomatic stakeholders expect a summit between Lee and Trump at the upcoming NATO summit next week.
Since President Lee's inauguration earlier this month, Korea and the US have emphasized the importance of strengthening their economic ties. The two countries are expected to seek cooperation in shipbuilding, energy and critical minerals, as well as negotiate the US-imposed tariffs on Korean exports.
The US' attempt to restructure global supply chains away from China has led to an ongoing trade dispute between the US and China and opened up new opportunities and risks at the same time for all economies involved, including Korea.
China recently resumed rare earth metals exports to the US but decided to allow them for only six months, meaning the tension over the global supply chain and ongoing trade war between the US and China will likely persist.
Korea's business sector has been swiftly taking various measures to cope with the rattling economic security. SK Group Chairman Chey Tae-won, who also serves as the head of the Korea Chamber of Commerce and Industry, met with President Lee to discuss the six strategies industries -- shipbuilding, energy, nuclear power, artificial intelligence, semiconductor and mobility -- that the country can create synergy in partnership with the US. Chey explained how Korean companies have practically contributed to the US economy.
In accordance with Chey's remarks on Korean firms benefiting the US' push to remove the reliance on China-involved supply chains worldwide, Korea Zinc announced on the previous day that it had invested $85 million to acquire a 5 percent stake in The Metals Company, a Nasdaq-listed Canadian deep-sea mining exploration company focused on extracting metals required for electric vehicles and low-carbon energy.
'With this investment, Korea Zinc can become one of the pillars that hold up supply chains excluding China,' said Korea Zinc. '(The Metals Company) also places an important value on the partnership with us, having China-unrelated assets and technologies.'
Earlier in the week, Korea Zinc revealed that it had shipped its first export of antimony to the US. Antimony, a key chemical element material used in electronics and military products, is designated as a strategic element. The shipment marked Korea Zinc's entrance into the US market and its intention to expand its network in the US.
"Once allied economies such as Korea and the US begin discussing specific areas of cooperation through summits, companies are projected to be in step with them and move quickly," said an industry official.
"Due to the escalating tension between the US and China, sectors related to economic security, such as energy, minerals, shipbuidling, defense and intermediate goods, are likely to be continuously emphasized moving forward."
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