KOTRA targets AI, supply chain, K-beauty to ride out US trade turbulence

Growing US investment in artificial intelligence, a reshaping of manufacturing supply chains, and the global spread of Korean culture — led by the popular cosmetics industry — are emerging as major opportunities for South Korean companies seeking to expand into North America. Korea Trade-Investment Promotion Agency is responding to trade uncertainties such as tariffs by diversifying both the range of export products and the modes of market entry, with a focus on these three areas.

KOTRA said Wednesday it held the "2026 North America Trade and Investment Expansion Strategy Conference" in Los Angeles on Tuesday (local time), chaired by KOTRA President Kang Kyung-sung.

The heads of 10 trade offices across the United States and Canada attended the meeting. KOTRA identified three major shifts in the North American market: the expansion of the AI industry, the restructuring of global manufacturing supply chains, and rising demand for Korean cultural content and consumer goods.

With volatility increasing due to tariffs and US-China tensions, the agency said it plans to spread risk by broadening the scope of exports and investment rather than relying on specific products or entry strategies.

AI topped the list of priority areas. As investment in data centers and semiconductor production facilities grows in the United States, demand for related infrastructure — from power grids and transformers to cables, ESS and cooling systems — is rising in tandem.

South Korea's exports of power equipment to the US from January through August this year reached $2.84 billion, up 15.3 percent from the same period last year. Semiconductor exports rose 292.7 percent to $2.08 billion.

KOTRA identified semiconductor materials, parts and equipment, along with transformers, cables, ESS and data center cooling systems, as the most promising export items tied to the spread of the AI industry.

Tightening US regulations on power supply chains are also a factor. The US government issued an executive order on Aug. 26 citing national security concerns over large-scale power grids, allowing authorities to ban or conditionally permit the procurement, import and installation of certain foreign-made power equipment deemed to pose excessive risks to national security or grid stability. Transformers, large generators, ESS, inverters and control systems are among the items covered.

KOTRA said moves to reduce dependence on specific countries within supply chains could open new supply opportunities for South Korean power equipment makers.

In June, KOTRA hosted the "Korea-US Physical AI Superconnect" event in Silicon Valley, bringing together more than 150 local companies and institutions — including Nvidia, Amazon, Tesla and Google — with 37 South Korean technology firms. In the second half of this year, the agency plans to send trade delegations focused on power equipment to Silicon Valley and Dallas.

Shifts in US manufacturing supply chains were cited as the second major opportunity. As US-China competition intensifies alongside Washington's push to revive domestic manufacturing, American companies are restructuring their existing procurement networks. KOTRA sees automobiles, shipbuilding, defense, semiconductors and energy infrastructure as sectors where South Korean materials, parts and equipment firms have strong prospects for new entry.

The agency also plans to move beyond simple parts supply, expanding cooperation into technology demonstration, joint research and development, and solutions provision.

A Korea-US Global Partnering event held in Chicago earlier this month brought together 20 large US manufacturers — including GM, Stellantis and heavy equipment maker CNH — and 61 South Korean materials, parts and equipment companies for supply chain partnership consultations.

KOTRA also plans to hold a North America automotive parts strategy consultation in Detroit in the second half of this year. The agency will identify in advance the specific items sought by automakers and major parts suppliers, then match them with suitable South Korean companies.

The third pillar is consumer goods riding the wave of Korean cultural influence, with cosmetics as the flagship product. Last year, the United States overtook China as the top destination for South Korean cosmetics exports for the first time. Exports to the US reached $2.2 billion, surpassing the $2 billion recorded for China. South Korea posted total cosmetics exports of $11.4 billion, making it the world's second-largest cosmetics exporter after France.

The growth has continued this year. Cosmetics exports to the US through August reached $1.87 billion, up 37.6 percent from the same period a year earlier.

KOTRA attributed the rise of the popular cosmetics industry in the US market to product differentiation centered on skincare, a diverse range of ingredients, and marketing through social media.

Going forward, the agency plans to provide South Korean small and medium-sized enterprises with information on retailer-specific certifications, logistics, minimum order quantities and listing requirements in the US market, while expanding product and marketing support tailored to local distribution channels. KOTRA also intends to help South Korean distributors and cross-border e-commerce platforms enter the US market alongside smaller consumer goods companies.

Tariff response and support for local investment will run in parallel. Working with US-based specialists, KOTRA will help companies navigate practical matters such as tariff refunds and rules of origin, while also assisting South Korean firms investing in the US with finding local partners and bringing along their suppliers.

The LA trade office also reviewed operations of "K-Maru," a government-led integrated overseas platform for public institutions. Los Angeles was designated in February as one of five inaugural pilot locations for K-Maru, alongside Hanoi, Nairobi, Dubai and Brussels. The initiative consolidates overseas offices of various public institutions under one roof, allowing companies to access marketing, financial and technical support in a single location.

"As seen in the US-China rivalry, tariffs and the war in the Middle East, the United States is at the starting point of a reshaping of the global trade order," KOTRA President Kang said. "It is important to seize opportunities amid uncertainty, particularly in areas of growing demand within the US market. We will do our utmost to help South Korean companies achieve greater results in North America by capitalizing on the expansion of AI, supply chain restructuring and the spread of Korean culture."