Trump threatens South Korea with tariffs over $54B Alaska LNG investment

Donald Trump has threatened to impose higher tariffs on South Korea if the country declines to invest in a $54 billion liquefied natural gas export project in Alaska, according to reporting by The Japan Times. The threat came as the two governments remain at odds over how Seoul will deploy hundreds of billions of dollars in investment commitments it made to the United States under a trade agreement signed last year.

Trump presented the Alaska LNG venture as a centerpiece of South Korea's obligations to invest in American infrastructure and industry. On Friday, when asked about Seoul's hesitation, he said tariffs would follow if South Korea refused to participate. The timing and the linkage were unmistakable: investment in this specific project, or face economic consequences. Yet the legal foundation for such a threat remains uncertain. Earlier in 2026, the US Supreme Court constrained Trump's authority to unilaterally raise tariffs, leaving open the question of whether he can actually impose the penalties he is threatening.

Seoul has not rejected the project outright. Instead, the South Korean government has attached a condition: it will invest only if the venture proves economically sound. That qualification reflects a fundamental disagreement about how to evaluate the deal. For months, Washington and Seoul have been negotiating which projects will receive portions of the hundreds of billions South Korea committed to invest. The process has been contentious, with each side viewing the allocation differently.

The announcement itself underscored the tension. When Trump unveiled the LNG project in the Oval Office on Wednesday, no official South Korean government representative was present. Instead, a representative of Glenfarne Group, the private company developing the project, attended. The absence was conspicuous—a signal that Seoul had not endorsed the initiative as a priority.

The disagreement extends beyond the LNG project. Trump also stated that the trade agreement allocates $8.4 billion for extracting oil from an aging field, another commitment he appears to view as settled. A South Korean Ministry of Industry official responded with surprise to this claim, according to the state news agency Yonhap. That official noted that the agreement is bound only by the terms of a joint fact sheet that Seoul and Washington released in November 2025—a narrower scope than Trump's interpretation suggests.

What emerges is a picture of two governments operating from different understandings of what was actually agreed to. Trump sees the trade deal as a mandate for specific megaprojects. South Korea sees it as a framework requiring case-by-case evaluation of economic merit. The tariff threat is Trump's attempt to collapse that distinction, to make the investment decision less about viability and more about political compliance. Whether he has the legal power to follow through remains an open question, but the pressure is real, and Seoul now faces a choice between accepting a project it views as questionable or absorbing the economic cost of Trump's displeasure.