Tax reform plan triggers market rout, political fallout in South Korea SEOUL, August 03 (AJP) - A sweeping tax reform proposal from President Lee Jae Myung’s administration has sparked political infighting and market turmoil, raising doubts about its ability to reconcile its pro-growth rhetoric with investor sentiment. Unveiled on July 31, the tax overhaul plan includes a controversial provision that would lower the threshold for shareholders subject to capital gains taxes from 5 billion won (about $3.9 million) per stock to 1 billion won ($770,000). It also calls for a hike in securities transaction tax rates and introduces a new separate dividend tax of up to 35 percent. The market response was swift and severe. On Aug. 1, the benchmark KOSPI index fell 126.03 points, or nearly 4 percent, closing at 3,119.41 — the largest single-day drop since early April. The sell-off ignited concerns that the government’s tax plan was undermining investor confidence and fueling volatility in already uncertain market conditions. As of 1 p.m. Sunday, a petition opposing the change to the capital gains threshold garnered over 90,000 signatures on the National Assembly’s public petition platform. At the heart of the criticism is what many see as a contradiction between President Lee’s campaign pledge to usher in a “KOSPI 5000” era and a tax policy that investors fear could deter market participation. Facing mounting backlash, Democratic Party floor leader Rep. Kim Byung-ki attempted to calm tensions, acknowledging widespread unease. “There are many concerns surrounding the tax reform proposal,” Kim said. “We will consider revising the 1 billion won threshold for large shareholders.” The main opposition People Power Party moved quickly to capitalize on the turmoil. In a statement on Sunday, senior spokesperson Park Sung-hoon accused the administration of precipitating a market collapse with what he called a reckless tax agenda. “With this tax reform, the Lee Jae-myung government and the Democratic Party aimed to raise 35.6 trillion won in revenue, but in just one day, over 100 trillion won in market capitalization was wiped out,” he said. Internal divisions within the ruling Democratic Party have also emerged. While some lawmakers defend the reform as fiscally responsible, others warn that it may jeopardize the stock market’s stability. Rep. Jin Sung-joon, the party’s policy chief, defended the lower threshold, arguing that similar tax changes under previous administrations had little impact on market performance. In a social media post, Jin noted that the capital gains tax threshold was gradually reduced from 100 billion won to 10 billion won under both the Park Geun-hye and Moon Jae-in administrations without major disruption. “Ironically, when the Yoon Suk-yeol administration raised the threshold back to 5 billion won, stock prices continued to decline,” he wrote. Jin framed the reform as a corrective measure, calling it essential to restoring fiscal balance. “The priority must be rebuilding the revenue base eroded by three years of regressive tax cuts under the Yoon government,” he said, pointing to the proposed restoration of a 1 percent corporate tax rate, a 0.05 percent transaction tax, and the 1 billion won capital gains threshold as steps toward that goal. But not all within the ruling party are on board. Rep. Lee So-young publicly opposed the tax plan, arguing that it runs counter to the government’s stated goal of channeling capital from real estate into financial markets. “This contradicts the policy direction the government has pursued until now,” she said in a Facebook post. 2025-08-03 16:03:06

US demand for rice market access clouds prospects for Lee-Trump summit SEOUL, August 03 (AJP) - A dispute over U.S. access to South Korea’s rice market is casting a shadow over a planned summit between South Korean President Lee Jae Myung and U.S. President Donald Trump, raising concerns that economic friction could spill into broader diplomatic discussions. American officials have claimed that South Korea agreed to open its rice market to U.S. imports as part of recent trade negotiations. But South Korean officials, including President Lee’s office and senior government officials, have denied any such agreement, calling the statements out of Washington "politically motivated." “There has been no discussion whatsoever regarding rice market access,” said Deputy Prime Minister and Finance Minister Koo Yoon-cheol on Aug. 2, after returning from trade talks in the United States. Speaking to reporters at Incheon International Airport, Koo dismissed comments by a White House spokesperson who had mentioned rice in the context of the agreement. “Rice was not on the table,” he said, emphasizing during a separate briefing at the South Korean Embassy in Washington that “the U.S. side recognized the sensitivity of agricultural issues in Korea, and we reached a consensus that there would be no further market opening.” The dispute intensified following remarks from Trump, who said South Korea had agreed to accept more American products, including agricultural goods. White House Press Secretary Caroline Leavitt echoed that statement, describing the deal as providing “historic market access for U.S. rice in Korea.” South Korean officials have pushed back, attributing the U.S. remarks to domestic political strategy, noting that American farmers remain a crucial part of Trump’s support base. “We believe this is political rhetoric,” said Agriculture Minister Song Mi-ryeong. She added that under the existing Korea-U.S. Free Trade Agreement, “99.7 percent of agricultural products are already open,” leaving little room for further concessions. The conflicting narratives come at a delicate time, with both governments signaling that a bilateral summit between Lee and Trump could take place in Washington within the next two weeks. Observers warn that if the rice issue surfaces during the talks, it could strain discussions not only on trade but also on broader areas such as security cooperation and regional diplomacy. 2025-08-03 10:27:09

South Korea's new ruling party leader rejects dialogue with PPP, citing threat to democracy SEOUL, August 03 (AJP) - Jung Chung-rae, a hardline lawmaker who is loyal to President Lee Jae Myung, ruled out cooperation with the conservative opposition People Power Party after being elected as leader of the ruling Democratic Party, on Aug. 2, denouncing the PPP as a “force that destroys democracy." Jung won 61.74 percent of votes in the party’s leadership contest, decisively defeating another Lee loyalist Rep. Park Chan-dae, who received 38.26 percent. Speaking to reporters after his victory, Jung drew a stark line between his party and the opposition, saying South Korea was “at war with rebellion” rather than engaged in routine partisan debate. “This is not a matter of ruling and opposition parties,” he said. “We must see this as a struggle between those who destroy democracy and the Constitution — the People Power Party — and those who defend it.” Jung was referring to an alleged plot involving martial law plans on Dec. 3, which he has characterized as an attempted insurrection. “They sought to arm military forces and storm the National Assembly, to dismantle the Constitution and even take lives,” he said. “Before any political engagement can occur, there must first be a sincere apology and reflection.” He accused some members of the People Power Party of continuing to support former President Yoon Suk Yeol. “As long as those who shield Yoon remain within the PPP, I cannot — and will not — shake hands with them,” Jung said. Jung also suggested that a special counsel investigation could reveal broader complicity in the purported plot. Should the probe uncover collaborators, sympathizers, or enablers within the People Power Party, he said, “public demand for a constitutional review and dissolution of the party will naturally grow.” He added, “At that time, I will exercise sound judgment as party leader.” In outlining his priorities, Jung pointed to sweeping institutional reforms as a mandate from the public. “The Korean people are calling for reforms of the prosecution, judiciary, and media,” he said. “Their demand is clear: finish the job before the Chuseok holiday on Oct. 6.” Acknowledging the potential for resistance, he added, “I will take on that resistance myself.” 2025-08-03 09:51:57

[[K-Tech]] Samsung to launch XR headset and tri-fold phone in second half SEOUL, August 01 (AJP) - Samsung Electronics will release extended reality headsets and tri-fold smartphones in the second half of 2025 as part of an aggressive expansion of its Galaxy ecosystem, the tech giant said Friday. The company also plans additional mergers and acquisitions to strengthen new business areas including artificial intelligence, medical technology, and heating, ventilation and air conditioning systems. Samsung's Mobile Experience division reported second-quarter revenue of 29.2 trillion won and operating profit of 3.1 trillion won. Revenue increased 6.6 percent and operating profit rose 39 percent from the same period last year, driven by strong sales of premium Galaxy S25 series smartphones and Galaxy Tab 10 series tablets. The company plans to boost third-quarter performance through increased sales of Galaxy Z Fold7 and Flip7 foldable devices launched in July, while strengthening marketing for the Galaxy S25 series. Daniel Araujo, executive vice president of the MX division, said the XR headset will incorporate AI functions based on an ecosystem built through collaboration with Google. The XR headset market has shown strong growth momentum, with the global extended reality market projected to reach 253.5 billion dollars in 2025 and grow at a compound annual growth rated of 30.4 percent through 2032, according to Fortun Business Insights. Meta currently dominates the market with a 74.6 percent share, while Apple’s Vision Pro captured 5.2 percent despite its premium 3,500 dollar price point, according to IDC data. Samsung’s entry comes as the industry landscape shifts following Microsoft’s exit from hardware development after discounting its HoloLens 2 headset in 2024. Apple’s Vision Pro launch accelerated market interest despite initial sales momentum slowing in the second half of 2024, creating opportunities for new players like Samsung to establish positions in the expanding XR ecosystem. Samsung acquired German HVAC company Plekt Group for 2.4 trillion won in May to expand its climate control business, targeting data center and commercial markets. The company has reactivated its M&A activities this year with three acquisitions including Plekt Group, US audio company Masimo's audio division, and US digital healthcare firm Zels. CFO Park Soon-chul indicated more acquisitions are under consideration across various new growth areas including AI, air conditioning systems, medical technology, robotics, automotive components, fintech and semiconductors. Samsung also plans to expand sales of AI-enabled TVs and home appliances while developing HVAC operations through partnerships with US joint venture Lennox and the newly acquired Plekt Group. 2025-08-01 15:19:34

Musinsa partners with government agency to boost K-fashion exports SEOUL, July 31 (AJP) - Korean fashion platform Musinsa signed a memorandum of understanding with the Seoul Regional Small and Medium Business Administration on Wednesday to support Seoul-based fashion brands' overseas expansion. The partnership aims to enhance export activities and provide practical support for small and medium-sized fashion companies seeking global market entry. Under the agreement, Musinsa will leverage its platform operations experience and global network to identify promising Seoul-area fashion brands with growth potential. The company will create dedicated promotional sections on its global store platform and provide discount coupon promotions to increase international customer exposure to participating brands. The collaboration will connect with the Seoul SMBA's existing "Legend 50+ Project," which focuses on strengthening global competitiveness of Seoul's fashion small and medium enterprises. Both organizations plan to develop synergies through coordinated support programs targeting regional fashion companies with export ambitions. Starting in the second half of 2025, participating brands will receive mentoring programs and customized education services designed to strengthen brand management capabilities. Musinsa will also implement sales and marketing enhancement initiatives through its global store infrastructure to facilitate international market penetration. Lee Byung-kwon, head of Seoul SMBA, said the partnership represents an exemplary case of combining Korea's leading fashion platform capabilities with government policy resources. The agreement comes amid heightened global interest in K-fashion, with both parties aiming to expand export opportunities for competitive Seoul fashion brands in international markets. 2025-07-31 16:09:56

[[K-Tech]] LG AI model EXAONE 4.0 ranks 11th globally in intelligence index SEOUL, July 31 (AJP) - LG AI Research's artificial intelligence model EXAONE 4.0 secured 11th place globally in the Intelligence Index evaluation by AI performance analysis firm Artificial Analysis, according to results announced Wednesday. The model ranked first among Korean AI models and fourth among publicly available open-weight models. The ranking was based on seven high-difficulty performance metrics including reasoning and knowledge capabilities, expert-level scientific problem solving, coding abilities, and mathematical problem resolution. EXAONE 4.0 achieved seventh place in coding and 10th place in mathematics, earning an overall score of 64 points alongside Anthropic's Claude 4 Opus. The model achieved these rankings despite being significantly smaller than many competing frontier AI models from global companies. LG AI Research ranked eighth among AI model development companies in the evaluation, which measures models against tasks such as MMLU-Pro, GPQA Diamond, LiveCodeBench, and AIME 2024. EXAONE 4.0, released on the Hugging Face platform on July 15 for research and educational purposes, reached 500,000 downloads within two weeks of its public release. The 32B parameter model has since exceeded 550,000 downloads, setting a record for Korean AI models in terms of fastest adoption rate. Both EXAONE Deep, released in March as Korea's first reasoning AI model, and EXAONE 4.0 have been included in Epoch AI's Notable AI Models list. This designation is used by Stanford University's annual AI report for comparing national and corporate AI competitiveness globally. 2025-07-31 16:09:42

Samsung Electronics posts 4.7 trillion won operating profit in second quarter SEOUL, July 31 (AJP) - Samsung Electronics reported final second-quarter operating profit of 4.7 trillion won on Thursday, slightly above preliminary guidance as the world's largest memory chipmaker navigated persistent industry challenges and China sanctions. Revenue reached 74.6 trillion won, up marginally from the 74 trillion won preliminary estimate released earlier this month. The final results confirmed a 55.2 percent decline in operating profit from the same period last year, when the company earned 10.4 trillion won. Quarter-on-quarter, operating profit fell 30.1 percent from the first quarter's 6.7 trillion won, while revenue declined 5.7 percent from 79.1 trillion won in the previous three months. The Device Solutions division, which includes memory chips and foundry services, posted revenue of 27.9 trillion won and operating profit of 400 billion won. Despite an 11 percent quarterly increase in sales driven by high-value server memory products and expanded foundry client base, operating profit dropped 800 billion won due to inventory provisions in the memory business and sanctions-related costs affecting advanced AI chip production. Samsung's memory business expanded shipments of HBM3E and high-capacity DDR5 products to meet surging AI server demand, while data center SSD sales also grew. However, one-time inventory asset provisions and China sanctions on advanced semiconductors weighed heavily on profitability, underscoring the complex operating environment facing chipmakers. The Device Experience division reported revenue of 43.6 trillion won and operating profit of 3.3 trillion won. Mobile sales declined from the peak first quarter when flagship models launched, but solid smartphone performance drove year-on-year growth in both revenue and operating profit while maintaining double-digit margins through resource optimization. Looking ahead, Samsung expects continued global uncertainty from trade tensions and geopolitical risks but anticipates gradual IT market improvement driven by AI and robotics expansion. The company plans to accelerate its 8th-generation V-NAND transition and strengthen its foundry business with 2-nanometer GAA process technology for mobile applications. 2025-07-31 14:32:40

[[K-Trade]] South Korean deputy PM meets US commerce chief on tariff talks SEOUL, July 30 (AJP) - South Korean Deputy Prime Minister and Finance Minister Koo Yoon-cheol held two hours of trade discussions with the United States Commerce Secretary Howard Lutnick on Tuesday (local time), South Korea's Ministry of Economy and Finance said. The meeting took place immediately after Koo arrived in Washington, D.C., with Trade Minister Kim Jung-kwan and chief trade negotiator Yeo Han-koo. The talks come as South Korea faces a 25 percent U.S. tariff on its exports starting August 1, part of President Donald Trump's "reciprocal" tariff policy affecting multiple countries, including Japan. Trump's 90-day pause on global reciprocal tariffs is set to expire, potentially exposing South Korean products, including automobiles and semiconductors, to steep duties. Upon arrival at Washington's Dulles International Airport, Koo said he came to meet Treasury Secretary Scott Bessent, who makes key decisions in Korea-U.S. trade negotiations. He pledged to conduct "national interest-centered negotiations" while explaining Korea-U.S. economic cooperation projects such as shipbuilding. Koo is scheduled to meet with Bessent on August 1 for what could be crucial talks ahead of the tariff deadline. The urgency has intensified after Japan secured a deal to cap US tariffs at 15 percent, raising concerns in Seoul that it could be left behind in the global round of negotiations. 2025-07-30 16:35:47

[[K-Biotech]] Celltrion to acquire US factory to counter potential drug tariffs SEOUL, July 30 (AJP) - South Korean biopharmaceutical company Celltrion said Tuesday it will invest up to 1.4 trillion won to acquire and expand a US manufacturing facility as a preemptive response to potential drug tariffs threatened by the Trump administration. The company plans to complete the factory acquisition this year and begin local production of drugs sold in the US from the fourth quarter of 2026. Celltrion announced it was selected as the preferred bidder for a US drug substance production facility owned by a global pharmaceutical company. The factory, located in a major pharmaceutical industry cluster, has been producing cancer and autoimmune disease treatments for several years. Contract details will be disclosed in October when the final agreement is signed. Chairman Seo Jung-jin said the acquisition and operation of the production facility will require about 700 billion won, with additional expansion costing between 300 billion and 700 billion won. The expanded facility could reach up to 1.5 times the production capacity of Celltrion's Songdo plant in Incheon, which has a 90,000-liter capacity. The acquisition includes a multi-billion won contract manufacturing agreement that will allow Celltrion to generate immediate revenue. Under the five-year deal, Celltrion will exclusively produce biopharmaceuticals for the selling company using half of the facility, while the other half will manufacture Celltrion's own products starting in the fourth quarter of 2026. Celltrion currently sells 11 biosimilar products in the US market, with plans to expand to 41 products by 2033. Seo said the company had stockpiled two years' worth of inventory in the US to provide time for setting up local production, while non-US sales will continue to be manufactured in South Korea. 2025-07-30 13:48:57

Samsung chief heads to Washington as tariff talks deadline with US looms SEOUL, July 29 (AJP) - Samsung Electronics Chairman Lee Jae-yong left for the U.S. on Tuesday to lend a hand in ongoing tariff negotiations between Seoul and Washington, according to industry sources. Lee's trip comes just a couple of days before the tariff deadline set by U.S. President Donald Trump looms later this week. Industry watchers expect Lee may offer Samsung's commitment to expanding investment in the semiconductor sector, as well as deepening cooperation in artificial intelligence-related technologies with the U.S. It also coincided with Samsung's signing of a record 23 trillion won contract for foundry supply with American electric vehicle giant Tesla the previous day. Under the deal, Samsung will produce Tesla's next-generation AI6 autonomous driving chips using 2-nanometer manufacturing processes at its facility in Taylor, Texas starting next year. Calling it a "key milestone for Samsung’s foundry business amid fierce market competition," Tesla CEO Elon Musk expressed his expectations on X, praising the partnership as a way to help Tesla maximize manufacturing efficiency. He added he would personally inspect production lines to accelerate progress in the partnership between the two companies. Market analysts believe the deal will create a favorable atmosphere for the tariff negotiations. Samsung is currently expanding its American operations with a mega factory under construction in Taylor, in addition to its existing foundry facility in Austin, also in Texas. 2025-07-29 18:10:15