GYEONGJU, South Korea (AP) — After successfully securing $490 billion in investment commitments during a charm offensive in Japan, President Trump is eyeing a more complex meeting with South Korea’s President Lee Jae Myung on Wednesday. However, a trade deal with South Korea remains elusive, largely due to ongoing tensions regarding Trump's demand for a substantial $350 billion investment from South Korea.
U.S. and South Korean officials indicate that South Korea views a direct cash injection as potentially destabilizing for their economy. Instead, they prefer to explore options like loans and guarantees. Moreover, South Korea seeks a currency swap line to manage dollar flows.
The upcoming meeting is significant as it coincides with the annual Asia-Pacific Economic Cooperation summit in Gyeongju, a city known for its historical heritage. Nevertheless, ongoing negotiations have not progressed as quickly as hoped, with Oh Hyunjoo, a deputy national security director, noting that the discussions are 'a little bit more slowly' than anticipated.
In terms of investment structure and profit distribution, talks have been fraught with disagreement. Unlike Japan, which is working towards fulfilling its commitments made under previous agreements, South Korea struggles under the weight of a 25% tariff on automobiles, putting brands like Hyundai and Kia at a considerable disadvantage compared to their Japanese counterparts.
Trump and Lee's previous interaction in August showcased a cordial relationship, but recent events, like a controversial immigration raid that affected Hyundai's Georgia plant, created ripples of distrust. Lee indicated that such incidents could hinder future investments, asserting that without improvements to the visa system, establishing U.S. factories could pose significant challenges.
As the South Korean Foreign Ministry has hinted at a framework for allowing short-term visas for workers involved in industrial projects, Trump is also planning a pivotal meeting with Chinese leader Xi Jinping amid ongoing trade tensions. Trump has even expressed openness to engaging with North Korean leader Kim Jong Un should an opportunity arise during this trip.
The unfolding dynamics in Gyeongju might set the tone not only for U.S.-South Korean relations but also for its broader geopolitical implications in the region.
