South Korea is unable to pay US$350 billion upfront in investment in the United States as President Donald Trump suggested under a deal to cut tariffs and is seeking an alternative solution, Seoul’s presidential adviser has said.
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Since a handshake deal by the allies’ leaders in July to lower US tariffs to 15 per cent from 25 per cent, as Trump earlier imposed, South Korea has said the US$350 billion in investment would be in the form of loans and loan guarantees as well as equity.
Trump in remarks this week said South Korea would provide the investment “upfront”, despite Seoul’s contention that kind of outlay could plunge Asia’s fourth-largest economy into a financial crisis.
“The position we’re talking about is not a negotiating tactic, but rather, it is objectively and realistically not a level we are able to handle,” South Korea’s National Security Adviser Wi Sung-lac said on Channel A News television on Saturday.
“We are not able to pay US$350 billion in cash,” he said.
South Korea, which pledged US$350 billion towards US projects in July, has balked at US demands for control over the funds and South Korean officials say talks to formalise their trade deal are at a deadlock.