Major US Ally’s Trade Rules Could Cost Americans Half A Trillion, Study Finds

A new study reports South Korea’s trade and regulatory policies could cost Americans as much as $500 billion or more over the next decade.

Research by the Competere Foundation estimates that the U.S. economy could lose as much as $525 billion over the next decade if Seoul continues to implement policies that restrict U.S. tech firms’ operations. Critics say the regulations, championed by the Korea Fair Trade Commission (KFTC) and President Lee Jae-myung’s administration, unfairly disadvantage American companies while giving Korean and Chinese businesses a competitive edge.

“The Korean government’s digital and competition policies are expected to cost an estimated $1 trillion in losses to both the U.S. and Korean economies over the next 10 years, with the U.S. shouldering an estimated $525 billion in economic losses – resulting in American households losing roughly $3,800 each,” Shanker Singham, president of the Competere Foundation, said in a statement.

“This is a significant financial loss that can be avoided by Korea stopping these damaging policies and allowing all companies to compete in a fair market,” he added.

Experts note that South Korea relies less on direct taxes on imports and more on regulatory and non-tariff barriers to give domestic industries an advantage over foreign competitors.

The country’s regulatory framework — including proposed laws such as the Fairness in Online Brokerage Transaction Act and the Online Platform Monopoly Act — places heavy compliance burdens on American firms, ultimately driving up costs for U.S. consumers, according to the Competere Foundation report.

These measures are modeled after the European Union’s 2022 Digital Markets Act (DMA), which ostensibly aims to curb monopolistic practices by targeting large platforms. In practice, however, critics — including the Trump administration — say the DMA and other digital taxes have generated economic losses while also unfairly burdening U.S. firms. U.S. lawmakers warn that Korea’s similar approach could produce comparable losses and restrict opportunities for American tech companies.

“South Korea’s actions are a direct result of the Biden Administration’s failure to confront rising digital trade barriers and provide strong American leadership,” Rep. Max Miller of Ohio told the Daily Caller News Foundation.

President Donald Trump announced a trade framework with South Korea in late July, including a $350 billion investment pledge by Seoul. While the details of the agreement are still being negotiated, officials say it could offer an opportunity to address regulatory barriers.

“To protect U.S. economic interests, I urge the Administration to engage with our partners in South Korea and prevent the unintended consequences of the Korean government’s misguided proposal, which threatens American competitiveness abroad,” Miller said

In July, Miller and over 40 House Republicans sent a letter to Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer, urging the administration to address Korea’s trade barriers. The lawmakers warned that the rules not only disadvantage U.S. companies but also “advance the interests of the Chinese Communist Party (CCP) by disproportionately targeting American companies while exempting major Chinese digital giants like ByteDance, Alibaba and Temu.”

“Allowing these companies to operate free from the regulatory burdens imposed on their U.S. competitors would substantially increase threats related to data security, disinformation, economic coercion, and espionage stemming from the CCP’s influence over such Chinese tech giants,” the lawmakers wrote.