SEOUL, South Korea — President Donald Trump’s recent assertion that South Korea, along with Japan, intends too invest “trillions of dollars each” in a $44 billion liquefied natural gas (LNG) pipeline project in Alaska has been met with skepticism in Seoul. Trump touted the project, which aims to transport gas from Alaska’s North Slope to Asia, during his speech to Congress on Tuesday.

The South Korean government has not made any concrete pledges regarding such an investment. Rather, Trump’s statement is being viewed as potential pressure to align with U.S. priorities, notably given the backdrop of recent tariffs imposed on countries like Canada, China, and Mexico. Trump announced on Thursday that he would delay some of the tariffs for a month.

the proposed pipeline, spanning 800 miles, would facilitate the transportation of natural gas from Alaska’s North Slope to southern regions of the state before being shipped to Asia. this region is home to some of the world’s largest LNG importers, including China, Japan, and South Korea.

Trump described the project on Tuesday as unprecedented, stating, there has never been anything like that one. It will be truly spectacular. It’s all set to go.

The Alaska LNG pipeline project has faced significant hurdles. Beyond concerns about its potential environmental impact, the project’s commercial viability has been questioned. In 2016, major players like ExxonMobil, BP, and ConocoPhilips withdrew from the initiative, casting further doubt on its feasibility.

This history of challenges has not gone unnoticed in Seoul, where officials are carefully considering the project’s merits.

Following a visit to Washington last month, during which South Korean officials sought exemptions from potential tariffs on aluminum and steel, Trade Minister Ahn Duk-geun emphasized the need for a thorough evaluation of the pipeline’s economic viability.He told reporters that the government needed to evaluate the plan’s economic viability.

Despite these reservations, Ahn acknowledged that participation in the Alaska pipeline project could be a strategic move, given South Korea’s history as a target of Trump’s trade deficit grievances.It seemed like the project was a huge priority for the U.S., he said. energy imports could possibly be a card we can play.

In his Tuesday address,Trump reiterated his concerns about the trade relationship with South Korea. He noted that 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 primary exports to the U.S. include semiconductors and cars, while its imports from the U.S. are primarily crude petroleum and machinery.

Trump also stated,South Korea’s average tariff is four times higher. 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.

The South Korean government disputes these figures. An official from the trade ministry responded shortly after Trump’s speech, stating, That is not consistent with the facts. We will explain that to the U.S. through various channels.

Trump’s statement appeared to reference World Trade Institution (WTO) statistics on average tariff rates applied to “most-favored nations.” In 2023, South Korea’s tariff rate for these countries was 13.4%, compared to 3.3% for the United States.

The South Korean government maintains that the majority of tariffs on goods traded between the two countries have been eliminated due to the thorough Free Trade Agreement (FTA) signed in 2007. According to a press release from the finance ministry last month, As of 2024, the average tariff rate on imports from the U.S. is approximately 0.79%. for reference, under the Korea-U.S. FTA, the tariff rate on imported manufactured goods from the U.S. is 0%.

While the low tariff rates suggest that reciprocal tariffs from the U.S. would have a minimal impact, concerns remain that Trump may impose tariffs to address other trade barriers he considers unfair. One such barrier is the value-added tax (VAT), which Trump has partly blamed for the United States’ $1.2 trillion trade deficit. South Korea currently levies a 10% VAT on all goods and services sold within the country, including imports.

Trump addressed this issue on Truth Social last month, stating, 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.

Trade analysts suggest that South Korea’s investment in the pipeline, along with a commitment to purchase Alaskan gas, could be a way to mitigate potential retaliatory measures from the U.S. It could also help fill a 9-million-ton gap resulting from the expiration of LNG supply contracts with Qatar and Oman last year.

Kang geum-yun, a senior researcher at the Korea International Trade Assn., stated, As far as it can definitely help to increase imports from the U.S. while also diversifying our energy supply,the pipeline could be a positive thing. 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 express reservations about the project’s long-term viability.

Kim Tae-sik, a researcher at the Korea Energy Economics Institute, a government think tank, points to the pipeline’s projected launch date in the early 2030s as a major concern. He said, 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.

Kim estimates that the pipeline would not be operational until 2040 at the earliest.

he further added, 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. The dominant view among analysts here is that frankly it’s going to be very tough to make the pipeline commercially viable — unless the U.S. or Alaska bring radically attractive terms to the table.

Interviewer: Dr. Lee, welcome. Your expertise on East Asian energy policy and international trade is invaluable. President Trump’s claims regarding South Korean investment in the Alaska LNG pipeline have sparked considerable debate. Can you shed light on Seoul’s cautious approach?

Dr.Lee: Thank you for having me.South Korea’s hesitation stems from a confluence of factors, not merely skepticism towards President Trump’s assertions. the Alaska LNG pipeline project

Is the Alaska LNG Pipeline a Risky Gambit or a Strategic masterstroke for South Korea?

Trillions of dollars hang in the balance, yet South Korea hesitates. Is the promise of Alaskan natural gas worth the geopolitical and economic risks? Let’s unravel the complexities of this monumental energy project.

interviewer: Dr. Lee, welcome.Your expertise on East Asian energy policy and international trade is invaluable. President Trump’s claims regarding South Korean investment in the Alaska LNG pipeline have sparked considerable debate. Can you shed light on Seoul’s cautious approach?

Dr. Lee: Thank you for having me. South Korea’s hesitation regarding the Alaska LNG pipeline isn’t simply about skepticism towards a particular politician’s statements; it’s a far more nuanced calculation. the decision involves weighing the potential benefits against considerable geopolitical and economic risks. Seoul must consider factors well beyond the immediate price of natural gas.

Interviewer: What are some of the key economic concerns driving South Korea’s cautious stance?

Dr. Lee: Several critical economic factors are at play. First, the sheer scale of the project—a $44 billion investment—is a significant commitment for any nation. The economic viability of such a massive undertaking is undeniably a primary concern. The history of this project, including the withdrawal of major energy players like ExxonMobil, BP, and ConocoPhillips, raises serious questions about its commercial feasibility. Adding too the uncertainty is the projected timeline for completion, which, given the logistical challenges of constructing a pipeline in such a remote and harsh habitat, could extend well into the future. This delay introduces further economic risk, as energy markets are dynamic and subject to considerable fluctuation. the potential for unforeseen delays, escalating costs, and legal challenges only compounds the financial uncertainty.

Interviewer: Could you elaborate on the geopolitical risks involved in South Korea’s potential participation?

Dr. Lee: The geopolitical implications are significant.South Korea’s involvement, or lack thereof, could have serious repercussions for its relationship with the United States, particularly given the ongoing trade tensions and the history of trade disputes between the two countries. The perception that investment in the pipeline is being “forced,” regardless of economic viability, can strain international relations. Moreover, South Korea must carefully navigate its relationships with other energy suppliers, such as china and Japan, to avoid jeopardizing these crucial alliances. Over-reliance on a single energy source from any one nation carries inherent geopolitical risks.

Interviewer: How might this project affect South Korea’s energy security?

Dr. Lee: Energy security is arguably South Korea’s primary motivation for considering this project. Diversifying energy sources beyond reliance on existing suppliers contributes to greater energy security. The Alaska LNG pipeline offers a perhaps significant alternative energy supply, reducing South Korea’s vulnerability to price volatility and supply disruptions from current sources. However, the risks surrounding the pipeline’s long-term viability must be carefully assessed to determine if the potential gains outweigh the considerable risks to energy security. The question of whether this pipeline offers truly reliable long-term energy security is central to the debate.

Interviewer: What are the alternative options South Korea is considering or should consider?

Dr. Lee: South Korea has several alternatives to consider. Investing in renewable energy technologies, like solar and wind power, to reduce reliance on fossil fuels would reduce the need for Alaskan natural gas in the long term. Continuing to cultivate its existing trade relationships with other energy-producing nations provides diversified supply sources. Thoroughly evaluating other LNG projects and diversifying energy sources are responsible steps in creating robust long-term energy security.

Interviewer: What is your overall assessment? Is this a strategic masterstroke or a risky gambit?

Dr. Lee: This project presents a high-stakes gamble for South Korea. The potential benefits in terms of energy diversification and improved U.S.relations are undeniable. However, the considerable economic and geopolitical risks associated with a project of this magnitude cannot be ignored. A thorough cost-benefit analysis, considering all potential outcomes, is crucial before making a decisive commitment. A conservative approach, prioritizing a diversified energy portfolio and fostering strong international relationships without overreliance on any single source, is the wisest course of action.

Interviewer: Thank you for your insights, Dr. Lee. This has been extremely helpful in understanding the intricacies surrounding the Alaska LNG pipeline.

Dr.Lee: you’re welcome. it’s a complex issue with significant implications for south Korea and the global energy market. I encourage readers to weigh the information carefully and engage in thoughtful discussions concerning this project’s potential impacts. Please share your thoughts in the comments below.