South Korean law could cost US states $525 billion, model finds

The new model shows the devastating economic losses for American companies if South Korea adopts a controversial law that would regulate transactions with other American companies as lawmakers warn that the country’s leadership is now “very close to China.”

The Online Platform Fairness Act, spearheaded by the Korea Fair Trade Commission (KFTC), has made inroads in the Asian nation and is backed by leftist South Korean President Lee Jae-myung. The Competere Foundation model estimates a loss of $525 billion in economic activity in US states over the next ten years, including a loss of $123 billion in California, a loss of $48.7 billion in Texas, a loss of $33.9 billion in New York and a loss of $27.4 billion in Washington.

“South Korea is an American ally and economic success story, which is why its recent and ongoing actions to restrict American companies – such as its 20-year ban on Google Maps – are very troubling,” Rep. Darrell Issa, R-Calif., told Fox News Digital. “I remain concerned that its current trade commission resembles the worst of Lina Khan’s FTC, not the free market culture that helped bring Seoul and Washington together.”

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Issa told Fox News Digital in April that South Korea’s leadership and the nature of the country’s Democratic majority are “very aligned with China.”

Yoon Suk-yeol, a conservative from the People Power Party, was elected president of South Korea in 2022, but was impeached in December 2024. His decision to impose martial law was a key factor in his ouster.

Jae Myung narrowly lost to Yoon in the 2022 presidential election, but won the presidency in 2025. The Democratic Party in South Korea already has a large majority in the National Assembly. The country now operates with a full Democratic majority.

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Trump is expected to press Xi about China’s economic and strategic support for both Iran and Russia, including oil revenues, dual-use materials and possible arms transfers, according to senior administration officials. (Andrew Caballero-Reynolds/AFP via Getty Images)

The Democratic Party is the main liberal party in the country, and favors progressive domestic policies as opposed to hardline views that have reduced political engagement with North Korea and improved relations with the US.

The proposed bill, pending in the South Korean assembly, would expand the powers of the KFTC – the very members of Congress that it criticizes for unfairly treating American companies.

Shanker Singham, a trade and global competition economist and CEO of the Competere Foundation, said that “Korea is already an increasingly popular place for US companies to do business” and that “the upcoming regulations will make that place even worse.”

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Supporters of former South Korean President Yoon Suk Yeol hold a rally outside the Seoul High Court in Seoul on April 29, 2026. (Ahn Young-joon/AP)

Former Utah Republican Chris Stewart also warned of South Korea’s stance on increasing regulatory burdens on US companies, telling Fox News Digital that it could affect more than just tech companies.

“South Korea’s campaign against American companies is not just a trade issue — it’s a strategic mistake that benefits China,” Stewart said. “Every time Korean regulators make it difficult for US innovators like Coupang, Google, or Meta to compete, they open up more space for Chinese companies to gain market share and influence in one of the world’s most important digital economies.”

Stewart noted that the costs will affect more than just Silicon Valley, combining economic losses with Chinese victories – as Beijing could take the market share lost to South Korea if American companies were to reduce investment.

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In early June, foreign policy experts Nicholas Eberstadt and Lawrence Peck published a column in the Wall Street Journal titled, “South Korea Turns Far Left Against America,” which alleged that South Korean officials had “attacked” US air force bases as part of a domestic investigation.

The logos of Internet company Coupang and security firm SentinelOne are displayed at their shared headquarters in Mountain View, Calif., on Oct. 28, 2018. (Smith Collection/Gado/Sipa USA)

The investigation revolved around Coupang, a US technology company similar to Amazon. In early June, South Korea fined Coupang nearly $410 million for the data breach — the largest fine the country has ever issued for a similar charge.

South Korea’s Science Ministry said a Chinese employee from Coupang stole customer information and data from an American company, including information about South Korean citizens.

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“The investigation into Coupang’s case is consistent with the nature of the data breach and is consistent with that applied to Korean companies in similar situations,” South Korean embassy spokesperson Minseong Seo told Semafor.

In April, 50 members of the House of Representatives expressed their concerns in a letter to the Ambassador of the Republic of Korea (ROK) to the United States Kyung-wha Kang about what they saw as “discriminatory” business practices.

Supporters of former South Korean President Yoon Suk Yeol hold a rally outside the Seoul High Court in Seoul, South Korea, April 29, 2026. (Ahn Young-joon/AP)

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The letter refers to a previous report from Competere that talked about economic losses in the US due to strict regulations from South Korea.

“Many American technology companies have faced a number of regulatory actions that seek to punish them while protecting domestic Korean competition,” the letter reads. “A recent study by Competere shows that these regulatory measures by the ROK government will cost $1 trillion in combined economic damage to the US and Korean economies over the next 10 years, with the US economy losing $525 billion and American families losing about $4,000 each.”