SEOUL (Reuters) -U.S. President Donald Trump insisted South Korea will provide billions of dollars in investments “upfront”, despite Seoul’s assertion that it would suffer a financial crisis if it meets the U.S. demands without safeguards.
In July, South Korea pledged $350 billion toward U.S. projects, but has balked at U.S. demands for control over the funds and South Korean officials say talks to formalise their trade deal are at a deadlock.
Earlier this month, Trump formalised a trade deal with Japan, lowering tariffs on Japanese automobile imports and other products in return for $550 billion of Japanese investment in U.S. projects, and U.S. officials have pressed Seoul to follow suit.
“We have in Japan it’s $550 billion, South Korea’s $350 billion. That’s upfront,” Trump told reporters on Thursday in the Oval Office as he touted the amount of money he said his sweeping tariffs have brought in.
South Korea, however, says it cannot afford to structure its investments in the same way as Japan, and President Lee Jae Myung told Reuters last week that without safeguards such as a currency swap, South Korea’s economy could be plunged into crisis.
One South Korean government official said they had no comment on Trump’s remarks, but reiterated that its stance remained that it would negotiate with the U.S. under the principle that the deal should meet national interests and is commercially feasible.
A senior finance ministry official traveling with Lee in the United States declined to comment when asked about the “upfront” comment.
Trump’s comments came as his trade talks with South Korea have become increasingly dogged by political doubts, spooking investors who now worry Seoul may end up with a raw deal or perhaps no deal at all.
Analysts say a currency swap is unlikely, and South Korean negotiators are pushing for most of the funds to be in the forms of loans, rather than direct investment. They are also pressing Washington for mechanisms to ensure that the projects are commercially viable.
(Reporting by Jihoon Lee and Cynthia Kimw; Writing by Josh Smith; Editing by Sam Holmes)
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