Business leaders revive Korea-Japan economic alliance push

As President Donald Trump announced a breakthrough trade deal with the United Kingdom on May 8, Commerce Secretary Howard Lutnick signaled that Asia would be the next major front. “We’re going to have to spend a tremendous amount of time with Korea and Japan,” he said, pointing to the complex negotiations ahead with two of America’s top manufacturing powerhouses and biggest trade deficit partners.

That same day in Seoul, SK Group Chairman Chey Tae-won, who also heads the Korea Chamber of Commerce and Industry, once again proposed the idea of a Korea-Japan economic alliance, this time in front of Democratic Party presidential candidate Lee Jae-myung. It was his second public mention of the idea, following a similar proposal at the National Assembly on April 22. Lawmakers at the time reacted with a mix of surprise and admiration, some remarking, “That’s a bold move.”

The proposal strikes a nerve. Historical animosities and lingering nationalism continue to cast a long shadow over Korea-Japan relations. Yet within the business community, a growing number believe economic pragmatism should take precedence.

Executives argue that while the two countries maintain an uneasy political relationship, they are economically complementary. Many see an opportunity to forge a regional alliance that could serve as a strategic counterweight to larger global powers.

Consider the case of semiconductors. In 2021, as the U.S. pushed for domestic chip production, American firm Western Digital sought to acquire Japan’s Kioxia, the world’s No. 2 NAND flash producer. Japan viewed the company as a critical national asset. Meanwhile, South Korea’s Samsung and SK—ranked No. 1 and No. 4 globally—saw the acquisition as a threat. Korean firms quietly coordinated with their Japanese counterparts and government officials, and the deal ultimately fell through.

There is precedent for productive cooperation. In the early 2000s, Samsung and Sony joined forces in the LCD market, dominating the global display industry for over a decade. Samsung manufactured the panels, while Sony used them to produce TVs—allowing both to share the costs of entry and gain a foothold in international markets.

Proponents of renewed cooperation see potential in areas such as semiconductors, batteries, electronics and autos. But they also acknowledge the risks. Economic blocs such as the European Union and the U.S.-Mexico-Canada Agreement have driven growth, but also triggered labor displacement and brain drain. A Korea-Japan alliance would need to address similar concerns, including industrial protection and wage imbalances.

Still, the business community’s call to action may open a path forward. If economic ties can help ease historic tensions, the result could be more than just growth—it could lead to political thaw and regional stability. But that would require more than boardroom agreements. It would demand sustained political effort, public buy-in, and social reconciliation.

“Staying the course isn’t a viable option anymore,” one executive said. The challenge now lies with governments and the public to match the boldness shown by the business community. The knots in Korea-Japan relations won’t unravel overnight—but it may be time to begin loosening them, one strand at a time.