Trump says South Korea wants to invest in the Alaska gas pipeline. Does it?

SEOUL — In his speech to Congress on Tuesday, President Trump said that South Korea, alongside other countries such as Japan, wanted to invest “trillions of dollars each” in a $44-billion liquefied natural gas pipeline in Alaska that he has touted since taking office.

But in South Korea, where the government has made no such concrete pledge, the claim is being interpreted as pressure to play ball amid the looming threat of tariffs such as those recently levied against Canada, China and Mexico (on Thursday, Trump said he’d delay tariffs on some Mexican products for a month).

“An unwelcome invitation to Alaska,” one newspaper headline read.

A supporter of impeached South Korean President Yoon Suk Yeol holds up a sign with images of businessman Elon Musk, Yoon and U.S. President Trump.

(Ahn Young-joon / Associated Press)

The project would build an 800-mile pipeline to transport gas drilled from Alaska’s North Slope to southern Alaska and then to Asia, home to three of the world’s largest importers of liquefied natural gas, or LNG: China, Japan and South Korea.

There “has never been anything like that one,” Trump said Tuesday. “It will be truly spectacular. It’s all set to go.”

But the proposal, controversial for its potential impact on the climate, has also been dogged by long-standing doubts about its commercial viability, with ExxonMobil, BP and ConocoPhilips backing out of the project in 2016.

That bumpy track record has not gone unnoticed in Seoul.

After a trip to Washington last month, during which South Korean officials asked the U.S. to exempt the country from any tariffs such as those recently placed on aluminum and steel, trade minister Ahn Duk-geun told reporters that the government needed to evaluate the plan’s economic viability.

Still, with South Korea having been a frequent target of Trump’s grievances about trade deficits, Ahn added that participation in the Alaska pipeline project might be a strategic concession worth making.

“It seemed like the project was a huge priority for the U.S.,” he said. “Energy imports could potentially be a card we can play.”

In his Tuesday speech, Trump reiterated his longtime dissatisfaction with what he described as a lopsided trade relationship with South Korea. In 2024, the U.S. trade goods deficit with Korea was $66 billion, according to the U.S. Bureau of Economic Analysis.

South Korea’s main exports to the U.S. are semiconductors and cars, while its imports from the U.S. are led by crude petroleum and machinery.

“South Korea’s average tariff is four times higher,” Trump said on Tuesday. “Think of that. Four times higher. And we give so much help militarily and in so many other ways to South Korea. But that’s what happens. This is happening by friend and foe.”

But the South Korean government has disputed those figures. “That is not consistent with the facts,” an official from the trade ministry said to reporters shortly after Trump’s speech. “We will explain that to the U.S. through various channels.”

Trump appeared to have been referring to the World Trade Organization’s statistics on average tariff rates that governments apply to trading partners designated as “most-favored nations.” In 2023, South Korea’s tariff rate for those countries was 13.4%, compared to 3.3% for the United States.

But the South Korean government has said that in practice, most tariffs on goods flowing between the two countries have been eliminated due to a comprehensive Free Trade Agreement that the two countries signed in 2007. “As of 2024, the average tariff rate on imports from the U.S. is approximately 0.79%,” the finance ministry said in a press release last month. “For reference, under the Korea-U.S. FTA, the tariff rate on imported manufactured goods from the U.S. is 0%.”

A stack of natural gas pipes is shown. Trade analysts say that South Korea’s investment in an Alaskan pipeline, along with a promise to buy Alaskan gas, may be the easiest way to keep any retaliatory moves by the U.S. at bay.

(San Diego Gas & Electric)

While this means that any reciprocal tariffs the U.S. applies to South Korea will likely have only a minimal impact, there are still fears that Trump will levy tariffs anyway in order to offset other trade barriers he has criticized as unfair.

The most notable example of this is value-added tax, or VAT, which Trump has partly blamed for the United States’ $1.2-trillion trade deficit with the rest of the world. South Korea currently levies a 10% VAT on any goods or services sold in the country, including imports.

“For purposes of this United States Policy, we will consider Countries that use the VAT System, which is far more punitive than a Tariff, to be similar to that of a Tariff,” Trump wrote on Truth Social last month.

Trade analysts say that South Korea’s investment in the pipeline, along with a promise to buy Alaskan gas, may be the easiest way to keep any retaliatory moves by the U.S. at bay — while also filling a 9-million-ton gap created by the expiration of decades-long LNG supply contracts with Qatar and Oman last year.

“As far as it can help to increase imports from the U.S. while also diversifying our energy supply, the pipeline could be a positive thing,” said Kang Geum-yun, a senior researcher at the Korea International Trade Assn. “The alternative to reducing the trade deficit for the U.S. is by cutting back our exports to them, but that is obviously not a desirable path.”

Energy experts, however, aren’t so sure.

A major point of skepticism is the pipeline’s projected launch date of the early 2030s, said Kim Tae-sik, a researcher at the Korea Energy Economics Institute, a government think tank.

“South Korean firms don’t have much experience building pipelines in such frigid conditions, so there can easily be unexpected delays in construction, not to mention any potential lawsuits from locals or environmental groups there,” he said.

Kim believes the pipeline would be operational by 2040 at the earliest.

“But there’s a good chance that by then, demand for gas in South Korea will have fallen alongside the broader push to decarbonize, which will lead to oversupply and depressed prices,” he said. “The dominant view among analysts here is that frankly it’s going to be very difficult to make the pipeline commercially viable — unless the U.S. or Alaska bring radically attractive terms to the table.”