South Korea’s Ministry of Trade, Industry and Energy (MOTIE) announced that the Indo-Pacific Economic Framework (IPEF) Supply Chain Agreement, a U.S.-led initiative involving 14 member nations, took effect on April 17. Trade minister Cheong In-kyo convened the first “New Trade Round Table” meeting of the year to discuss strategies for leveraging the agreement to strengthen supply chain resilience.

The meeting brought together industry associations, academia and research institutions to explore potential joint projects with IPEF members. It focused on diversifying import sources for critical materials such as elements, graphite, and rare earth permanent magnets and improving R&D and logistics. Cheong emphasized the need for policies that bolster supply chains.

Why It Matters

South Korea’s reliance on China for critical materials like graphite and rare earth metals poses significant risk amid escalating U.S.-China trade tensions. As China is South Korea’s vital trade partner and the U.S. remains its principal security ally, diversifying supply sources through the IPEF is crucial to mitigate geopolitical risks and safeguard its semiconductor and battery industries.

However, the prospect of Donald Trump’s re-election complicates Seoul’s position, given his intentions to withdraw the U.S. from IPEF. Such a withdrawal could significantly weaken the framework, challenging South Korea’s strategy to reduce dependence on Chinese imports and expand economic relations with other IPEF members.

Given the uncertainties surrounding the IPEF’s stability, South Korea will likely intensify its outreach to African countries to secure access to critical minerals. Africa, which holds about 30% of the world’s mineral reserves and significant portions of the global oil and natural gas supplies, is a strategic focus for South Korea. The upcoming South Korea-Africa summit in Seoul will serve as a platform to secure favorable investment conditions for South Korean businesses in Africa. Additionally, South Korea has already begun to bolster its relationships with these nations by distributing this year’s first batch of rice to countries facing food shortages, including eight African nations, Afghanistan and Yemen.