South Korea Trade Deal Faces Hurdles Despite Trump’s Asia Trip
GYEONGJU, South Korea – President Trump’s efforts to strengthen economic ties with key Asian allies are facing challenges in South Korea, even after a successful visit to Japan. While Japan has committed to significant investments in the U.S. economy, negotiations with South Korea on a new trade agreement are proving more difficult.
The main issue appears to be President Trump’s request for South Korea to invest $350 billion in the United States. While South Korean officials express a willingness to invest, they are hesitant to make direct cash injections, fearing it could harm their economy. Instead, they prefer to offer loans and loan guarantees.
This difference in approach could cast a shadow over President Trump’s meeting with South Korean President Lee Jae Myung in Gyeongju, where the annual Asia-Pacific Economic Cooperation summit is being held.
A South Korean security official said that negotiations are progressing slower than hoped. The official noted disagreements over the structure, format, and profit distribution of the proposed investments.
This contrasts with the situation in Japan, where the government has been actively working to fulfill its commitment of $550 billion in investments.
Meanwhile, South Korea continues to face a 25% tariff on automobiles exported to the United States, which puts them at a disadvantage compared to Japanese and European automakers who face lower tariffs.
Adding to the complexity, a recent U.S. immigration raid on a Hyundai plant in Georgia, where a number of South Korean workers were detained, has created some tension. Some worry this may make South Korean companies hesitant to invest in the U.S.
President Trump acknowledged concerns about the visa system, saying that improvements would help companies bring skilled workers to the U.S.
During his trip, President Trump is also scheduled to meet with Chinese leader Xi Jinping, and has suggested that he would meet with North Korean leader Kim Jong Un if the opportunity arose.
