A dispute over South Korea's response to a Coupang data breach is escalating into a broader U.S.-South Korea confrontation, with congressional sources and people close to the company warning that Washington could consider sanctions or additional tariffs if Seoul does not change course. Coupang is headquartered in Seattle but conducts most of its business in South Korea. South Korea imposed a 625 billion won fine, or about $457.2 million, in June and said the breach affected 37.55 million people, while Coupang maintained that a former employee retained information connected to roughly 3,000 accounts. The differing figures reflect separate measurements of data exposed and data actually retained. A Republican House Judiciary Committee report also alleged that South Korean authorities, including the National Intelligence Service, directed Coupang to hire divers to recover a laptop from a river in Shanghai. South Korea's embassy called that claim entirely without merit, saying the NIS held only working-level consultations and did not coerce or direct the company. Senator Bernie Moreno has urged U.S. Trade Representative Jamieson Greer to open a formal investigation under Section 301 of the Trade Act, following a January petition by Coupang investors Greenoaks Capital Partners and Altimeter Capital. No formal investigation has been announced. The dispute is unfolding alongside tensions over regulation of U.S. companies, South Korea's $350 billion investment commitment under the countries' 2025 trade agreement, new tariffs, and the scaling back of annual military exercises. A White House official said the exercise decision was not directly linked to Coupang, while Democrats have questioned the Republican focus on the company but some Washington lawmakers have also criticized Seoul.