Washington: South Korea's Finance Minister Koo Yun-cheol stated Thursday that it is uncertain whether U.S. President Donald Trump can be convinced to accept Seoul's stance against a US$350 billion upfront investment payment as part of a trade deal agreed upon in July.
According to Yonhap News Agency, Koo made these comments during a meeting with reporters in Washington, D.C. South Korea has resisted Trump's demand for a significant direct equity investment, citing concerns that it could negatively affect Korea's foreign exchange market and potentially lead to a crisis similar to the 1997 Asian financial meltdown.
"I understand that a swift upfront payment of $350 billion is what the U.S. has talked about," Koo said. Despite discussions with U.S. officials, Koo expressed uncertainty about persuading President Trump to accept South Korea's position.
During a meeting with U.S. Treasury Secretary Scott Bessent on Wednesday, Koo communicated Korea's concerns about the potential destabilizing effects of the upfront payment on the foreign exchange market. "I have told Secretary Bessent that given the foreign exchange circumstances (in Korea), it is difficult for Seoul (to make an upfront payment), and Secretary Bessent is aware that it is difficult for Korea to make such a payment all at once," he said.
Koo also requested Bessent to convey Seoul's position to other Trump administration officials, including Commerce Secretary Howard Lutnick. Bessent reportedly assured Koo that he would provide a thorough explanation to them.
The minister highlighted the importance of evaluating the impact of investment schemes on the stability of Korea's foreign exchange market. "If that scheme involves investing $350 billion upfront, that would create a problem in terms of foreign exchange market stability," he noted. However, if South Korea's concerns are considered in the investment scheme, the adverse effects on the market could be mitigated.
The trade deal framework, reached in late July, includes South Korea's commitment to invest $350 billion in the U.S. in exchange for the U.S. agreeing to lower its "reciprocal" tariff and specific duties on South Korean automobiles from 25 percent to 15 percent. Despite this agreement, the deal has not yet been implemented as negotiations continue over unresolved issues, including the funding of the investment package.
Koo was in Washington, D.C., to participate in meetings of the Group of 20 finance ministers and the annual gatherings of the International Monetary Fund and World Bank.