South Korean President Lee Jae Myung is pushing back on the terms of a proposed $350 billion trade and investment deal with the United States, which it had initially agreed to with President Donald Trump in July, saying that any agreement must be “commercially rational” and reflect the interests of both nations.
Calls For ‘Commercial Rationality’ In Terms
Lee met with U.S. Treasury Secretary Scott Bessent during the United Nations General Assembly in New York on Wednesday.
According to Lee’s chief policy secretary, Kim Yong-beom, the meeting centered on the massive investment package, which he says was agreed to “in principle” by Lee and Trump in July, as part of a broader deal to reduce tariffs on South Korean exports, according to a Reuters report.
“With regard to the investment package with the U.S., (Lee) expressed hope that the discussions would progress based on commercial rationality and in a direction that serves the interests of both countries,” Kim said at a briefing.
South Korea’s Finance Minister Koo Yun-cheol, who accompanied Lee, also held separate talks with Bessent, expressing concerns regarding the scale of the proposed investment and its potential impact on the country’s currency reserves.
Seeks Currency Swap With Washington
Earlier this week, Lee had warned that Trump’s demands for a $350 billion investment in the U.S. could trigger a 1997-style Asian Financial meltdown.
“Without a currency swap, if we were to withdraw $350 billion in the manner that the U.S. is demanding and to invest this all in cash in the U.S., South Korea would face a situation as it had in the 1997 financial crisis,” Lee said.
Kim reiterated the same, asking for a foreign exchange swap with an unlimited credit line from the U.S. to support any final agreement. According to South Korean officials, Washington is currently reviewing its proposal for such a swap to be put in place.
Meanwhile, the South Korean Won broke a psychologically important level of 1,400 against the U.S. Dollar on Thursday, reaching 1,405.7, before retreating to 1,401.4, at the time of writing. This marks the Won’s weakest level since mid-May.
Read More:
Photo Courtesy: Andy.LIU on Shutterstock.com
