Detained Workers Released, Arriving at Incheon Airport at 4 PM Today.

• 330 individuals, including 316 South Koreans and 14 foreigners.
• The South Korean government made two strong demands: first, they must travel without handcuffs, and second, there must be no repercussions upon re-entry.
• The release was delayed due to Donald Trump (U.S. President) suggesting they stay to continue working instead of being sent to South Korea, which required review. Cho Hyun (Minister of Foreign Affairs) stated, “The public is too exhausted, so we decided to return home for now.”
• Although they claim, “We received assurances of no repercussions,” this remains to be seen.
• One U.S. permanent resident chose to remain instead of voluntarily departing.

What Matters Now.

What Lee Jae-myung’s 100-Day Press Conference Revealed.

• Lee Jae-myung (President) held a press conference.
• While disagreeing with the contentious issue of the stock transfer tax threshold for major shareholders, he said he would respect the National Assembly’s decision. His stance was flexible: implement it first, then consider changes.
• He emphasized, “Fiscal health is about ratios, not absolute amounts.” He strongly signaled a willingness to increase national debt to drive economic growth.
• While dismissing concerns about abandoning nuclear phase-out as unrealistic, he stressed the need to expand renewable energy.
• “Policy should not become an ideological battleground,” he said, adding, “I am a thoroughgoing pragmatist.”
• His commitment to prosecutorial reform was firm: separate investigations from prosecutions, but further review the supplementary investigation authority. He vowed to proceed dispassionately and meticulously, resolving it within a year.
• He framed South Korea’s role as a “pace-setter” between North Korea and the U.S. as “necessary for the economy and people’s livelihoods.” If Trump could be leveraged, he implied, it should be done.
• The revised Media Arbitration Act, which penalizes false reporting, was corrected from “punitive damages” to “multiple damages.” He argued for upholding free expression but holding accountable those with malicious intent. “I am the biggest victim,” he claimed.
• He drew a firm line: “Crushing rebellion is not open to compromise.”
• Related Link.

“Would Discarding the Jar Fix the Maggots?”.

• This is the so-called “jar theory.” The maggots represent the police, the jar symbolizes prosecutorial reform.
• The core issue is separating investigation and prosecution, and it has been decided that the SIU (Serious Crimes Investigation Agency) will fall under the Ministry of the Interior and Safety, not the Ministry of Justice. The government plans to finalize discussions on supplementary investigative authority within a year.

“Establishing a Rebellion Tribunal, How Is That Unconstitutional?”.

• Kyunghyang Shinmun, Chosun Ilbo, JoongAng Ilbo, and The Hankyoreh all headlined “Establishing a Rebellion Tribunal, How Is That Unconstitutional?” on their front pages, but their tones differ.
• Lee Jae-myung (President) said, “Power has a hierarchy, and the judiciary must judge within the structure set by the legislature.” He implied that directly elected power (the president) holds precedence over indirectly elected power (the courts).
• Cha Jin-ah (Professor, Korea University) told Chosun Ilbo, “Claiming that elected power stands above the judiciary is itself anti-democratic and anti-legal.” Kim Hyung-jun (Professor, Pai Chai University) noted, “This is a self-serving, expedient interpretation of the constitutional spirit.”
• A legal expert with a constitutional research background, interviewed by The Hankyoreh, stated, “The essence of the three-tier trial system guaranteed by the constitution is not that the Supreme Court holds final judgment, but that effective trials must be ensured at each level.” They added, “If there is a risk of unconstitutionality in the factual trial, merely leaving the final judgment to the Supreme Court cannot be said to align with the constitution.”
• Related Link.
• Related Link.

Deep Dive.

“The Media Ruined My Son’s Life.”.

• “I, too, have suffered immensely,” he said, adding, “My son is working normally at a company, but because the media sensationalized his alleged employment at Hwacheon Daeyu, he still cannot find a job.”
• The remarks came during a discussion about punishing false reporting. “Freedom of expression is truly important,” he emphasized, “but with special protection comes responsibility.”
• He outlined two principles.
• First, this is not an attack on the press. If anyone maliciously fabricates false information intentionally, they should be held liable for compensation.
• Second, intentional fabrication and honest mistakes are different. Even in cases of gross negligence, punitive damages are unwarranted if there was no intent.

“Integration and Patchwork Must Be Distinguished.”.

• “You cannot compromise with someone who stole 10 items by saying, ‘Steal only five.’ That is neither compromise nor integration. Theft must stop entirely.”
• This comment was made regarding the special prosecutor bill revision.
• The People Power Party agreed to the government reorganization in exchange for not extending the special investigation, but he drew a line: “I do not want that.”
• “How can we trade one for the other? Not reorganizing the government does not prevent us from working. Is it not a fundamental value of a democratic republic to uncover the truth of the insurrection, hold those responsible accountable, and ensure such acts are never even dreamed of again? This is not a compromise. I do not want that. The government reorganization bill can wait.”

A Stronger Special Prosecutor Bill, Clash Between Jeong Cheong-rae and Kim Byung-ki.

• The Democratic Party broke the agreement. Calls flooded the floor leader’s office asking, “Is this a watermelon?” On top of that, the president himself stepped in to say “No,” so Kim Byung-ki (Democratic Party floor leader) eventually stepped back.
• Two days prior, discussions with the People Power Party had settled on not extending the investigation period, minimizing personnel expansion, and the PPP cooperating with the government reorganization.
• Jeong Cheong-rae (Democratic Party leader) said, “It was very confusing because it went against the leadership’s intentions.” In the end, Kim Byung-ki reversed course, declaring, “Negotiations have collapsed,” and the Democratic Party pushed forward alone.
• Kim Byung-ki reportedly vented his frustration at a closed-door general meeting, saying, “The investigation period differs by only 15 days between the agreement and the revised bill.” In a meeting with reporters, he said, “Tell Jeong Cheong-rae to apologize publicly.”
• Claims also surface that Jeong Cheong-rae framed Kim Byung-ki. “Common sense says Kim Byung-ki and Jeong Cheong-rae must have talked before the negotiation was finalized. If they flip-flop like this due to hardline public opinion, what’s the point of future opposition negotiations if they can’t even get approval?” said a Democratic Party insider.
• Related Link.

Saemangeum Airport Must Not Happen.

• The court ruled that the risk of bird strikes was deemed excessively high—up to 656 times greater than at Muan Airport.
• Saemangeum Airport was a long-cherished project for the North Jeolla region, approved under the Moon Jae-in administration. The budget: 935.9 billion won. Target opening: 2029. Construction has yet to begin.
• Gunsan Airport already exists just 1.4 kilometers from the proposed Saemangeum site.
• Related Link.

Arrest Warrant Sought for Sambu Construction Vice Chairman.

• He is accused of participating in Sambu Construction’s 2023 stock price manipulation. The special prosecution believes Lee Ki-hoon (Sambu Construction Vice Chairman) colluded in manipulating the company’s stock price from May to September 2023, securing hundreds of billions of won in illicit profits.
• An arrest warrant was already requested in July, but he evaded questioning and went into hiding before being apprehended.
• Lee allegedly deceived investors by suggesting Sambu Construction would participate in Ukraine’s reconstruction projects. The company’s stock price surged more than fivefold within two months.
• This may be linked to Lee Jong-ho (former Black Pearl Investments CEO), who managed Kim Gun-hee’s accounts in the Doichi Motors case, and left a message in a Marine Corps group chat before the stock spike: “Check Sambu tomorrow.”

A Motion to Arrest Kwon Sung-dong, Even Kwon Smirked.

• His expression was pleasant. In the People Power Party, only Kwon Sung-dong (People Power Party lawmaker) attended and cast a vote in favor.
• He is accused of receiving 100 million won from a Unification Church affiliate just before the 2022 presidential election. Only 100 million won has been confirmed so far, but additional amounts could emerge. Whether any funds flowed to Yoon Suk-yeol and his wife is also critical.
• Kwon Sung-dong stated, “Who would exchange political funds upon a first meeting?” adding, “I feel utterly devastated.”

Another Take.

Back-and-Forth on Stock Transfer Tax: A Retreat in the End.

• The government initially planned to lower the major shareholder threshold from 5 billion won to 1 billion won, but ultimately decided against it.
• The original plan was to ease stock transfer taxes while introducing a financial investment income tax. However, after scrapping the financial investment tax in November last year, the government moved to tighten the stock transfer tax criteria—only for the Lee Jae-myung administration to eventually back down amid market backlash.
• At yesterday’s press conference, Lee Jae-myung remarked, “I wonder if we should exempt up to 5 billion won,” while adding, “If government policy risks dampening market sentiment, there’s no need to insist.”
• Although a projected tax revenue shortfall of 200–300 billion won is expected, the administration prioritizes stock market revitalization.

No More Selling Homes to Pay Inheritance Tax.

• Lee Jae-myung said, “I cannot agree to lowering inheritance tax rates,” but added, “It’s too cruel to force people to sell their homes and leave because they don’t have the money.”
• With an inheritance tax deduction of 1 billion won, those exceeding that amount face a 30–40% tax. Raising the deduction to 1.8 billion won was a campaign pledge.
• Lee Jae-myung stated, “I said it, so I must keep it,” and added, “I had forgotten, but thank you for pointing it out.”

“Accept the Agreement or Pay Tariffs.”.

• That’s what Howard Lutnick (U.S. Secretary of Commerce) said. “Japan has signed,” he emphasized.
• The U.S. government’s proposed agreement requires South Korea to accept that the U.S. will invest $350 billion, but Trump will decide the investment targets and retain 90% of the profits. If South Korea signs, tariffs will be reduced to 15%; if not, they’ll rise to 25%.
• Related Link.

“The Talks Went So Well, No Agreement Was Needed.”.

• Kim Yong-beom (Chief Policy Officer to the President) said this immediately after the tariff negotiations. Two weeks later, he stated, “Negotiations with the U.S. are at an impasse.”
• Ko Se-wook (The Kookmin Ilbo columnist) noted, “The U.S. position was consistent, and we misread it,” adding, “The cracks in the ‘too-smooth talks’ are glaring.”
• Related Link.

Israel Strikes Yemen—Again, Without Warning Trump.

• This time, too, they didn’t inform Trump in advance.
• Bombs rained down on Sana’a, Yemen’s capital held by Houthi rebels, killing at least 35 and wounding 131.
• According to the Wall Street Journal, Trump called Benjamin Netanyahu (Israeli Prime Minister) twice after Israel’s Qatar strike to rebuke him: “It was unwise.”
• This “Trump bypass” has thrown cold water on his Nobel Peace Prize ambitions as a “peace maker.”

Trump’s Tantrum, Google Behind It?

• Analysis suggests Trump’s refusal to sign the tariff negotiation executive order stems from Google’s request. Reuters analyzed, “Trump views Google Maps issues as a non-tariff trade barrier and is pressuring the South Korean government.”
• Politico analyzed, “The U.S. sees South Korea’s response as a litmus test for pressuring other trade partners.” The implication is that if South Korea yields, the EU could be next.
• Allowing Google to operate its mapping service in South Korea is one of the company’s demands piggybacking on Trump’s tariff war.
• The South Korean government insists, “If you want map data, set up servers here and operate a business.” Google objects, stating, “Cloud-based services could face stability issues if data is confined to specific regions.”
• The core issue isn’t data export—it’s taxes. If data centers are established in South Korea, they’d be recognized as permanent business establishments, requiring tax payments. The Ministry of Land, Infrastructure, and Transport has set a deadline of November 11 for a decision.
• Ultimately, Google wants to operate globally, freely use data, but avoid paying taxes.
• From 2004 to 2024, Google Korea’s cumulative revenue is estimated at a maximum of 237.3 trillion won and a minimum of 96.7 trillion won. Applying Naver’s average corporate tax rate (7.4%), Google Korea’s owed taxes would range from a maximum of 17.56 trillion won to a minimum of 7.16 trillion won.
• Google reports major revenue streams—YouTube ad income and app market fees—under its Asia-Pacific subsidiary in Singapore.
• In 2023, Google paid 15.5 billion won in corporate taxes, but analysis suggests it should have paid 622.9 billion won based on actual revenue generated in South Korea.
• Related Link.
• Related Link.

The Fix.

A Whale in a Pond.

• As of the end of June, the National Pension Service’s fund stood at 1,269 trillion won—roughly half of the KOSPI’s 2,512 trillion won market cap.
• The fund recorded a 31% return on Korean equities in the first half of this year. Overseas equities returned 1%, foreign bonds -5%, and alternative investments -3%. Overall returns were around 4%.
• The fund’s depletion date is projected for 2065, but a 1 percentage point increase in returns could delay it until 2072.
• Joo Jeong-wan (JoongAng Ilbo columnist) emphasized, “A whale in a pond is destined to perish someday.” Eventually, it must sell off its holdings. Investment performance cannot always be positive. Instead of merely listing results, the fund should disclose risks and use annual reports as a communication tool.
• Related Link.

U.S. Labor Costs Five Times Higher Than Korea’s.

• A senior executive at a major conglomerate remarked, “It’s not that Americans are lazy. They simply lack a manufacturing mindset. Finding experienced engineers is mission impossible.”
• Young people prefer food service over factory work. They avoid semiconductor plants where smartphones are unusable.
• U.S. manufacturing jobs fell from 20 million in 1979 to 12.8 million. In a survey of Gen Z and Millennials, only 14% expressed willingness to work in factories.
• Kim Hyun-soo (Dong-A Ilbo Business Editor) stressed this is not just another country’s story: Korea’s manufacturing employment has declined for 14 consecutive months.
• Related Link.

ICYMI.

‘Lazy Nation,’ Germany’s Manufacturing Collapse.

• Germany has lost 250,000 manufacturing jobs since 2019. Unemployment has surpassed 3 million.
• The Washington Post analyzed, “Germany, once renowned for diligence, now faces economic and existential crises as its citizens work fewer hours.”
• Last year, Germany’s average annual working hours were 1,331—shorter than Greece’s (1,898) or Portugal’s (1,716), once derided as ‘lazy nations.’ South Korea, for reference, logged 1,872 hours.
• Statistics also show Germans take 20 annual vacation days and an average of 19 sick days.
• Germany’s short working hours reflect structural issues: 48% of employed women work part-time, compared to 10% of men. Male employment stands at 61%, female at 44%. The Washington Post noted, “Many schools and daycare centers close by afternoon, making full-time work difficult for both parents.”
• Related Link.

KOSPI Breaks Ceiling, Uneasy Bull Market.

• Corporate earnings are underperforming compared to 2021. While market sentiment remains high, warnings persist about vulnerability to external variables.
• In Q2 2021, corporate sales rose nearly 19% quarter-on-quarter, with economic growth at 4.6%. This year’s Q2 saw corporate sales fall -0.7%, with growth projections at 0.9%.
• Kim Hak-kyun (Shinyoung Securities Research Center Director) analyzed, “Global liquidity dependency has intensified.” This implies investor sentiment has become more decisive.
• Seol Tae-hyun (DB Securities Researcher) stated, “Delayed rate cuts or downward revisions to earnings estimates could weigh heavily in the short term.”
• Related Link.

Bank of Korea Warns: “Expectations for Rising Home Prices Persist.”.

• The June 27 measures were effective but only cooled overheating—prices have not yet stopped rising.
• The Bank of Korea insists that interest rate cuts must not fuel expectations of rising home prices.
• The central bank estimates that 26% of Seoul’s apartment price increases in the first half of this year were driven by rate cuts. The remaining 74% stemmed from supply-demand dynamics, regulations, and sentiment.
• Rates are unlikely to be adjusted until housing prices stabilize.

MAGA Evangelist Gunned Down.

• Trump said, “A great legend, Charlie Kirk, has died.”
• He was shot in the neck while answering a questioner at a Utah Valley University lecture who asked, “Do you know how many transgender mass shooters there are?”—to which he replied, “Too many.”
• Charlie Kirk founded Turning Point USA, established chapters in 850 universities, and supported Trump. The Wall Street Journal assessed, “For young male voters, Kirk was a symbol of political reform.”
• He visited the White House over 100 times during Trump’s first term and endorsed JD Vance (U.S. Vice President) early on.
• Related Link.

Worth Reading.

Manufacturing Hollowing-Out: This Time It’s Real.

• Two decades ago, when Korean companies expanded into China, domestic investment remained active.
• According to Huh Jung (Sogang University Professor), research showed that from 2008–2013, Korean firms built 1.07 new factories for every one closed. Low-value factories were moved to China, while high-value intermediate goods were produced in Korea and exported to the country.
• But now it’s different. Manufacturing employment has declined for 14 consecutive months. The number of “discouraged” youth breaks records monthly.
• Yoo Chang-jae (The Korean Economic Daily Economic Bureau Chief) warned, “If the $350 billion investment is executed, the pace of manufacturing job losses could accelerate.”
• Related Link.

Georgia’s Crisis Leaves a Fundamental Question.

• Citizens don’t need chartered flights sent after an accident has erupted. This is the proposal of Jang Dae-ik (Professor at Gachon University).
• First, exact schedules must be provided. Disclose average processing times for essential procedures like visa reviews, training, insurance, background checks, and site access approvals—and automatically trigger corrective measures if deadlines are exceeded.
• Second, precise documentation is required. Visa types, employment contracts, safety and labor training, family support—these should be consolidated into a single-page guide per person, clarifying “who, under what status, and until when they can stay” before deployment.
• Third, record-keeping is critical. Link primary contractors and first- and second-tier subcontractors in a single electronic registry to track in real time who enters where, based on what authorization.
• Fourth, each project needs a transit pass. “This person will work on this process during this period”—this transparent certification must be shared. It’s about designing the ‘experience’ of labor mobility.
• Related Link.