When South Korea’s biggest online retailer Coupang revealed a data breach affecting 33.7 million customer accounts last November, it seemed a straightforward corporate crisis. Five months later, the issue has escalated into a diplomatic storm, threatening to further strain relations between Seoul and the Trump administration.
Coupang, often described as South Korea’s answer to Amazon, is a US-incorporated company headquartered in Seattle and listed on the New York Stock Exchange. The breach occurred when a former employee stole an internal security key. In response, South Korean police raided the company’s Seoul headquarters, tax authorities launched a special audit, and parliament summoned executives for questioning. CEO Bom Kim, a Korean-American billionaire, refused to travel to Korea for hearings.
Reports suggest Washington may have linked high-level diplomatic and defence consultations to guarantees that Kim would face no legal consequences. South Korea’s foreign ministry did not deny the report but stated that security discussions should proceed separately from the Coupang matter and that investigations would continue under Korean law. The dispute has also affected talks on US support for South Korea’s nuclear-powered submarine programme, with a scheduled US delegation visit postponed.
The Coupang row adds to existing tensions between the allies. In September, an immigration raid at a Hyundai-LG battery plant in Georgia detained over 300 South Korean workers. The US has also partly restricted intelligence sharing after a South Korean minister publicly identified a suspected North Korean nuclear site. In January, President Trump threatened to raise tariffs on South Korean goods from 15% to 25%.
Coupang has spent over $11 million on US lobbying since 2021, including $3 million in 2025. In the first quarter of 2026, it doubled its lobbying spending. Vice-president JD Vance raised the issue with South Korea’s prime minister in January, hoping for a fair resolution. In April, 54 Republican members of Congress wrote to Seoul’s ambassador, accusing South Korea of a “whole-of-government assault” on Coupang over a “low-sensitivity data leak”.
Five US investment firms holding Coupang shares have filed for arbitration under the US-Korea free trade agreement, claiming Seoul’s enforcement was disproportionate. Professor Jaechun Kim of Sogang University noted that the fundamental issue is how such actions are perceived and politicised within the alliance framework, as the Trump administration tends to blur economic and security issues.
