[Gyeongju APEC] U.S.-South Korea Struggle to Reach Deal Ahead of Summit Amid Disagreements Over $350 Billion Investment

Trump Favors Cash Investment
Lee Jaemyung Prefers Loans and Guarantees
Trade Deal Remains Uncertain

As the second U.S.-South Korea summit is scheduled for October 29, there are predictions that reaching a trade agreement between the two countries will not be easy. This is due to differences in positions over the detailed implementation plan for the $350 billion (approximately 480 trillion won) investment in the United States.

President Lee Jae-myung is delivering a special keynote address at the opening ceremony of the Asia-Pacific Economic Cooperation (APEC) CEO Summit held at the Gyeongju Arts Center in Gyeongbuk on the 29th. 2025.10.29 Photo by Kang Jinhyung

The Associated Press reported that although President Trump is about to meet with the South Korean leader, there has been little progress in the U.S.-South Korea trade agreement as a result of this meeting. Politico also stated, "The Trump administration has eased some of its initial demands, but the detailed structure of the investment remains the biggest challenge." The outlet pointed out that if President Trump relaxes conditions to accommodate the South Korean side, it could set a precedent for other countries negotiating trade deals with the United States in the future.

This atmosphere is also reflected in statements from senior officials on both sides. Oh Hyunju, the Third Deputy Director of the National Security Office, said on October 27 that the likelihood of concluding the U.S.-South Korea trade negotiations during the Asia-Pacific Economic Cooperation (APEC) summit or the summit between the two countries was low. She stated, "The negotiations are proceeding a bit more slowly than expected," adding, "We have not yet reached an agreement on the structure and form of the investment or the method of profit distribution."

U.S. Treasury Secretary Scott Besant also told reporters aboard Air Force One on October 28, "Negotiations with the South Korean side have not yet reached the final stage," explaining, "There are a lot of details, but we are making progress."

According to senior officials from both countries cited by the Associated Press, the biggest obstacle to reaching a deal is the specific implementation method for the $350 billion investment. The South Korean government has expressed concern that the large-scale cash injection demanded by the Trump administration could destabilize the domestic economy, and therefore prefers to participate in the form of loans or guarantees rather than direct investment. In addition, the South Korean side insists that even if such forms of investment are made, a currency swap agreement between the two countries must be concluded simultaneously.

The longer the trade negotiations between the two countries are delayed, the greater the burden becomes for South Korean companies. Currently, Korean automobiles are subject to a 25% tariff. Compared to the 15% tariff on Japanese and European vehicles, companies like Hyundai Motor and Kia are at a competitive disadvantage.

This delay in negotiations stands in stark contrast to President Trump's achievements during his recent visit to Japan. The Japanese government has pledged $550 billion in investment in the United States as part of a previously signed trade agreement, and U.S. Secretary of Commerce Howard Lutnick announced at a dinner with Tokyo business leaders that a $490 billion investment pledge had been finalized. At that time, President Trump visited an aircraft carrier with Japanese Prime Minister Sanae Takaichi to encourage U.S. troops and announced plans to promote energy and technology projects in the United States with Japanese funding, highlighting the image of a "friendly alliance."

Meanwhile, during the APEC summit, there is also growing attention to the possibility of a "surprise meeting" between President Trump and Kim Jong Un, Chairman of North Korea's State Affairs Commission. President Trump has recently been sending daily messages expressing his hope for a surprise meeting with Chairman Kim. He has even said he is willing to extend his schedule to meet with Kim Jong Un.

However, North Korea continues to maintain its position that it will not engage in dialogue unless the United States withdraws its demand for denuclearization. Even on the eve of President Trump's visit to South Korea, North Korea conducted a show of force by launching cruise missiles over the West Sea.