[Insight & Opinion] What Will Remain If Everything Leaves?

Under Trump's 'America First' Pressure,
Serious Outflow of Korean Capital, Talent, and Companies
Clear National Goals and Institutional Reforms Needed

At least for the next four years, the United States is expected to bewilder all countries around the world with a completely different appearance than before. It will no longer be the America that embraced alliances based on the value of liberal democracy and acted as a bulwark against hostile camps. Instead, it seems to prioritize the interests of the American corporation above all else.

"Along with border closures, I will deport 14 million illegal immigrants. Increase defense spending significantly for allies like South Korea and NATO. Terminate FTAs with neighboring countries such as Canada and Mexico and raise the tariff walls of the United States. To avoid tariffs, produce within the U.S. I will reclaim the Panama Canal. I will call only the Gulf of Mexico 'America'." These statements even show ambitions for territorial expansion including Canada and Greenland.

It is clear that these unilateral policies will shake the existing international order, but there is much debate about whether they will ultimately benefit the U.S. It is too early to judge the results when the U.S., which has been at the forefront of free trade for decades, raises barriers. The low-income groups supporting Trump’s policies may face more difficulties due to rising labor and manufacturing costs.

What I focus on is not the right or wrong or effectiveness of Trump’s policies, but the clarity of their problem recognition and response strategy. Secretary of State Rubio of the second Trump administration stated as his inaugural remark that U.S. foreign policy will prioritize the enhancement of American interests according to the president’s pledge. Everything done at the State Department must be justified by one of three questions: ‘Does it make us stronger?’ ‘Does it make us safer?’ ‘Does it make us more prosperous?’ The goals a nation should pursue could not be clearer or stronger than this.

What is the serious problem facing the Republic of Korea? Although political instability and incompetence cause much concern, in the long term, the increase in outflow of capital, talent, and companies (including overseas investment and foreign capital mergers and acquisitions) appears serious. One wonders what will remain if everything leaves.

Looking at the outflow of million-dollar-plus wealthy individuals by country in 2024, South Korea ranked fourth after China, the United Kingdom, and India, but it is likely first in per capita terms. On the other hand, countries with high inflows are the United Arab Emirates, the United States, Singapore, and Canada. What is noteworthy is that wealthy individuals are leaving Korea.

President Park Chung-hee dreamed of building an industrialized nation by attracting talent from abroad, establishing scholarship foundations to send students overseas, and sending senior officials for overseas training. In a country without natural resources, talent was seen as the key to economic development. Those who studied abroad played key roles in government, schools, research institutions, and companies. However, recently, it has become common not to return after studying abroad but to settle permanently overseas. Moreover, early (middle and high school) overseas study is increasing to facilitate permanent settlement. On top of this, high-level talent is leaving in pursuit of better treatment and environments.

To avoid domestic anti-business sentiment and policies and to enhance global competitiveness, corporate overseas investment is increasing, but under pressure from the second Trump administration, relocations within the U.S. are expected to increase further.

We must clearly define the direction of our national governance in line with what the Trump administration is doing. Preventing the outflow of capital, talent, and companies must be the standard for all policies. When education systems, good jobs, childcare environments, treatment of professors and researchers, freezing university tuition, the world’s highest inheritance tax, and laws, systems, and practices that constrain companies are evaluated by this standard, the tasks to be done become clear.

Kim Hong-jin, CEO of Work Innovation Lab