South Korea resists Trump’s US$350 billion trade demand amid financial crisis fears

Delivering on an order amounting to 84 per cent of South Korea’s foreign currency holdings could trigger a financial meltdown, analysts warn

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South Korean President Lee Jae-myung (right) talks with US Treasury Secretary Scott Bessent in New York on Wednesday. Photo: EPA/Yonhap

Published: 1:11pm, 25 Sep 2025Updated: 3:44pm, 25 Sep 2025

South Korea is digging in as negotiations stall over a US demand for a staggering US$350 billion in direct investments, a condition that critics warn could plunge Seoul into a financial crisis.

President Lee Jae-myung indirectly criticised Washington’s pressure tactics at a meeting with US Treasury Secretary Scott Bessent in New York on Wednesday.

Stressing that any agreement should make sense commercially, Lee warned against forcing Seoul into a deal that could destabilise its economy. Kim Yong-beom, presidential chief of staff for policy, said Lee expressed hope that discussions on the proposed package “move forward in a way that is based on commercial rationality and aligned with the interests of both countries”.

Under a framework agreement reached in July, President Donald Trump’s administration offered to cut tariffs on South Korean imports from 25 per cent to 15 per cent – but only if Seoul committed US$350 billion in investments into sectors selected by the United States.

Follow-up negotiations have broken down over key issues, including how the package would be structured, profit-sharing mechanisms and broader conditions.

US Commerce Secretary Howard Lutnick has bluntly warned that Seoul must accept the deal or face higher tariffs, noting that Japan has already agreed to similar terms.

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