New research from the Competere Foundation shows the U.S. could lose an estimated $525B; Korean economy, small businesses would suffer $469B in losses.
The US and Korea are negotiating a trade deal to lower the high tariff imposed on Korea by the US. Reforms to Korea’s regulatory culture could be a landing zone for both parties.
WASHINGTON, Oct. 21, 2025 /PRNewswire/ — Korea’s discriminatory competition policies – which often undermine U.S. companies’ ability to operate in Korea – could trigger a combined $1 trillion in economic losses for both countries over the next 10 years, with the U.S. poised to suffer the biggest losses.
The U.S. would lose an estimated $525 billion if Korean officials continue to enact policies that limit American technology companies’ ability to offer key services to Korean customers, including online retail, social media, mapping and other logistics services offered by Apple, Coupang, Google, Microsoft and others.
The problematic policies – including aggressive regulatory enforcement by the Korea Fair Trade Commission (KFTC) – stem from officials’ claims that American firms have an unfair advantage over Korean businesses and are designed to give Korean regulators decision power over which companies win or lose in the market.
According to new research by the Competere Foundation, a non-profit foundation focused on educating policymakers about non-tariff barriers impacting global GDP, regulations in Korea could cost the average American household roughly $3,800 in economic losses over the next 10 years, and exacerbate ongoing trade challenges between the U.S. and Korea.
Korea itself could also lose an estimated $469 billion due to discriminatory regulations that disincentivize foreign direct investment, which will disproportionately impact and damage the country’s micro, small and medium businesses (MSMEs).
Aggressive regulatory frameworks in Korea – including the proposed Fairness in Online Brokerage Transaction Act, the Online Platform Monopoly Act (PMA), and various anti-competition laws being enforced through the KFTC – are increasingly designed to handicap larger American firms by subjecting them to excessive regulatory requirements that obstruct free market competition in favor of Korean companies, which creates downstream costs for U.S. consumers.
However, the research also shows that by addressing the U.S. governments’ concerns about disproportionate regulation of American firms, Korea can avoid economic losses and reclaim significant foreign investment opportunities.
“The Korean government’s digital and competition policies are expected to cost an estimated $1 trillion in losses to both the U.S. and Korean economies over the next 10 years, with the U.S. shouldering an estimated $525 billion in economic losses – resulting in American households losing roughly $3,800 each,” said Shanker Singham, President of the Competere Foundation. “This is a significant financial loss that can be avoided by Korea stopping these damaging policies and allowing all companies to compete in a fair market. Addressing these issues, including the KFTC’s excessive regulatory targeting of foreign firms, would be a win-win for both countries’ economic futures, and could help resolve trade tensions.”
Anti-competitive policies could stunt Korean small businesses
Beyond damages to the U.S. and Korean economy projected by Competere, economies across the broader Asia Pacific region could also be impacted by these types of policies, with MSMEs shouldering the majority of the pain, additional research shows.
Smaller businesses, which often face fewer financial resources and greater skills gaps than large corporations, are increasingly leveraging digital services offered by U.S. tech firms to compete in global markets and reach millions of customers, according to the Information Technology and Innovation Foundation (ITIF). This includes everything from using AI to improve efficiency, leveraging online commerce and mapping services for logistics support, and processing customer sales through payments platforms.
However, research by the Southeast Asia Public Policy Institute (SEAPPI) shows that increasing regulation of these digital platforms across the broader APEC region could generate more than $3 billion per year in annual compliance costs, with South Korea alone accounting for $512 million. An estimated 70% of that annual burden would fall directly on MSMEs, and could risk stifling one of the most important pathways for the Asia Pacific’s regional growth. Millions of MSMEs account for more than 98% of enterprises in the region.
“Overly prescriptive, one-size-fits all regulations could inadvertently undermine the very businesses they are designed to protect, impacting millions of small and medium businesses across the Asia Pacific region, and having a negative impact on the global economy,” said Ed Ratcliffe, Executive Director, SEAPPI, “APEC leaders have an opportunity to build smart, context-sensitive rules that safeguard fairness and trust without undermining the small businesses that power their digital economies.”
Swift movement by the Korean government to reform longstanding protectionist policies driven by the KFTC – which are increasingly seen as an outlier relative to other advanced economies – would enable Korea to reclaim significant economic value and foreign investment, and help stabilize economic and security ties between the U.S. and Korea.
To read the full Competere study and view its methodology, click here.
Competere Media contact: Tristian Marquez tristanmarquez@competerefoundation.org
