The U.S. and South Korea are struggling to finalize a deal in which Seoul invests in American projects in exchange for a lower tariff rate from President Trump.
South Korean officials say it would be difficult to meet the U.S. side’s demand for the investment money up front.
“From our perspective, it is not possible to pay $350 billion in cash,” National Security Adviser Wi Sung-lac told reporters on Monday.
South Korean officials reiterated that they need special safeguards, such as a currency swap, to finance the projects, according to the Yonhap News Agency.
Officials from Seoul have been meeting with Washington counterparts to finalize a deal that would reduce Mr. Trump’s tariffs on South Korean products from 25% to 15%.
Japan paved the way with a similar deal that calls for even steeper investments in America in exchange for a lower rate.
The South Korea deal ran into trouble because the two sides cannot agree on how it should be structured.
The U.S. side characterized it as a direct cash payment.
“From one case, we’re getting $950 billion. In Japan, the figure is $550 billion. South Korea is $350 billion. That’s up front,” Mr. Trump said at a recent trade event.
The South Korea side is trying to proceed delicately.
“As negotiations with the U.S. are taking place in a highly intense atmosphere, I believe we should use all available cards, but we must not overplay them,” Mr. Wi said.
Negotiations were complicated by a recent U.S. immigration raid of a Hyundai Motor battery plant in Georgia.
It caused dismay in Seoul, given that more than 300 South Korean workers were arrested, but South Korean negotiators do not think it will harm the bilateral relationship.
South Korea and the U.S. are working on a new visa system, which could assist planned investments in America, though Seoul tried not to link the immigration and trade issues too closely.
“There are strong public sentiments and various demands, but we must not handle the issue emotionally,” Mr. Wi said. “If the government’s position is to create a new visa category, it is important not to overplay the matter by setting targets beyond that.”
