In Seoul, alarm bells are ringing. Washington is demanding an eye-watering US$350 billion in direct investment, a sum so vast that economists warn it could tip South Korea into a crisis unseen in its modern history.
US Commerce Secretary Howard Lutnick bluntly asserted last week that South Korea must accept the deal or face higher tariffs – pointing out that Japan had already agreed to similar terms.
Under a framework agreement reached in July, the United States offered to reduce proposed tariffs on South Korean imports from 25 per cent to 15 per cent, but only if Seoul pledged to invest the US$350 billion into sectors chosen by Washington and made additional concessions.
Yet follow-up talks, including during President Lee Jae-myung’s visit to Washington last month, have reached an impasse over the structure of the investment package, profit-sharing mechanisms and other conditions. “The devil is in the details,” as Lutnick put it on Thursday.
US President Donald Trump has been sharply critical of South Korea, calling it a rich “money machine” that exploits its alliance with America, citing trade surpluses he claims are evidence of unfair practices.
