[Economy Pulse] Should We Keep Relying on Secretary Lutnick?

Former U.S. President Joe Biden emphasized the importance of a "whole-of-government approach" to address major national issues. This approach means that all relevant departments and agencies respond collectively to specific issues-such as supply chain stability, climate change response, cybersecurity, and China policy-under the coordination of the White House.

Immediately after taking office, then-President Biden issued the "Clean Energy Executive Order" based on a report prepared with the participation of the Environmental Protection Agency, Department of Energy, Department of Transportation, Department of State, and Department of Defense. To resolve supply chain disruptions caused by the COVID-19 pandemic, the Departments of Commerce, Defense, Energy, and Health and Human Services jointly developed a supply chain stabilization strategy. In the U.S. strategy toward China, the Departments of State, Commerce, the Office of the U.S. Trade Representative, Treasury, Homeland Security, and Defense all participated, implementing policies such as technological decoupling, human rights, economic security, export controls, and trade regulations through a whole-of-government approach.

President Donald Trump, in contrast to the previous administration, has divided foreign policy-issues that affect the entire world-by department and fostered competition among them. Instead of policies with national legitimacy, ideas that align with the president's preferences are being pushed through without sufficient coordination.

According to U.S. immigration law, the president can issue temporary and emergency executive actions regarding immigration visas based on his discretion and authority. The H-1B visa is intended for employing foreign professionals, and the lead department is the Department of Homeland Security, which oversees the Immigration and Customs Enforcement (ICE) agency that led the Georgia raid two weeks ago. The Department of Homeland Security was established as part of a fundamental overhaul of the U.S. national security and disaster response system after the September 11, 2001 terrorist attacks, consolidating 22 federal agencies to centralize intelligence and security functions.

The recent executive order signed by President Trump to impose a $100,000 (approximately 140 million KRW) fee on H-1B specialty occupation visas is difficult to understand. It is puzzling that Secretary of Commerce Howard Lutnick was involved in visa affairs-taking precedence over the Secretary of Homeland Security, who oversees immigration visas, as well as the Secretaries of State and Labor, who are deeply involved in related work. Reports indicate that Secretary Lutnick played a leading role.

Earlier this month, ICE and other agencies raided the Hyundai Motor and LG Energy Solution electric vehicle battery plant in Georgia, detaining 475 people, including about 300 Koreans. The South Korean Minister of Trade, Industry and Energy immediately traveled to the U.S. to request a solution from Secretary Lutnick, and the U.S. side mentioned a new visa policy. However, contrary to expectations, the situation worsened. Secretary Lutnick, who previously extracted $550 billion and $350 billion in special purpose company (SPC) fund investments from Japan and South Korea, respectively, proposed the idea of profiting from H-1B visas as a response to the ICE raid.

President Trump included Secretary Lutnick at the executive order signing ceremony and even gave him an opportunity to speak. The Secretary of Commerce, who should be supporting foreign-invested companies, instead took the lead in imposing a 100-fold visa fee and positioned himself as a protector of workers rather than an advocate for industry. Major U.S. technology companies, which rely on foreign talent, are also dissatisfied. The Secretary of Commerce, responsible for attracting investment, has instead raised the barrier for Korean companies investing in the U.S. After the astronomical SPC funds, Korean companies have once again been put at a disadvantage.

Visa issues in the U.S. are directly and indirectly linked to foreign policy, national security, labor, trade, and education, and should be decided through nationwide coordination. While the $100,000 visa fee may provide only a marginal benefit to the federal government's fiscal deficit, it will seriously disrupt the U.S. industrial strategy of attracting global talent and fostering advanced industries. Paradoxically, this could present an opportunity for Korean companies. It is time to establish and implement a strategy to attract global professionals who have given up on moving to the U.S. A comprehensive review of the current U.S.-Korea trade negotiation strategy, which is overly dependent on Secretary Lutnick, is urgently needed.

Jung Ingyo, Professor of International Trade at Inha University (Former Chief Negotiator for Trade)