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Talks on $350B U.S. investment gain pace with hopes of deal ahead of APEC

Published: 21 Oct. 2025, 19:24 Updated: 21 Oct. 2025, 19:58

U.S. President Donald Trump gestures during a meeting with Australian Prime Minister Anthony Albanese in the Cabinet Room at the White House, in Washington Oct. 20. [REUTERS/YONHAP]

Negotiations between Korea and the United States over a proposed $350 billion investment fund are regaining momentum after months of deadlock, as political pressure mounts on both sides to deliver diplomatic results ahead of the APEC Economic Leaders' Meeting in late October.

With the summit set to take place in Gyeongju, the possibility is growing that the two countries will announce a top-down agreement — potentially in the form of a joint statement issued during a bilateral summit between Presidents Lee Jae Myung and Donald Trump.

Kim Yong-beom, presidential director for national policy, and his negotiating team reported to President Lee that “the remaining issues require presidential-level decisions,” according to government sources on Tuesday.

Officials from both countries are reportedly considering a framework deal that would confirm Korea’s $350 billion investment in the United States and reduce tariffs on key products such as automobiles from 25 percent to 15 percent — laying out broad terms rather than finalized details.

Last week, senior Korean officials including Kim, Deputy Prime Minister and Finance Minister Koo Yun-cheol, Industry Minister Kim Jung-kwan and Trade Minister Yeo Han-koo held Cabinet-level negotiations in Washington. They are believed to have reached a partial consensus with their U.S. counterparts.

Korean negotiators emphasized that Washington's demand — a full cash investment or an up-front equity contribution — was unrealistic given Korea’s foreign exchange constraints. U.S. officials are said to have accepted this argument to some extent.

“The United States has accepted much of our position, and they are no longer demanding a full cash investment,” Industry Minister Kim said Monday after returning to Seoul.

Members of civic groups hold a press conference in front of the statue of Yi Sun-sin in Gwanghwamun Square, central Seoul, on Oct. 21, calling for a full review of U.S.-bound investments and condemning U.S. President Donald Trump for pressuring Korea to increase its investments in the United States. [NEWS1]

Remaining points of contention include the ratio of cash to be paid up front, how the remaining amount will be financed through loans or guarantees and whether the overall fund structure is commercially viable.

“We still need to fine-tune one or two issues,” Kim Yong-beom said.

Heo Yoon, a professor at Sogang University’s Graduate School of International Studies, said the United States has proposed a modified version of the memorandum of understanding (MOU) signed with Japan in August, incorporating Korean concerns.

“There appears to be agreement on a phased funding structure, potentially linking currency swaps and capital calls for future disbursements,” Heo said.

However, the professor noted that issues remain over the fund's governance structure, loss-sharing mechanisms and the scope of Korea’s participation in investment decisions. “At APEC, the two sides are likely to settle on a broad joint statement and leave unresolved specifics to follow-up talks,” he said.

Detainees are made to stand against a bus before being handcuffed, during a raid by federal agents where about 300 Koreans were among 475 people arrested at the site of a $4.3 billion project by Hyundai Motor and LG Energy Solution to build batteries for EVs in Ellabell, Georgia, Sept. 4. [REUTERS/YONHAP]

Global investment bank Morgan Stanley echoed that view in a recent report, projecting that a Korea-U.S. MOU may be signed around the APEC Economic Leaders' Meeting. The report said the most realistic solution would combine a reduced up-front cash ratio with a parallel currency swap arrangement with the U.S. Federal Reserve.

Analysts agree that the ultimate success of the deal hinges on President Trump’s decision.

“Until President Trump makes the final call, uncertainty will remain,” said one trade expert, speaking on condition of anonymity. “Given his unpredictable approach to decision-making, it is crucial for the Korean government to avoid provocation and focus on projecting a message of contributing to U.S. domestic projects.”

Despite progress, experts warned that without a clear written agreement outlining conditions, methods and timelines, confusion could arise — as seen in Japan’s recent deal with the United States.

While Minister in charge of Economic Revitalization Ryosei Akazawa said Tokyo’s equity share in the investment fund was just 1 to 2 percent, a White House fact sheet released in July said “Japan will invest $550 billion directed by the United States to rebuild and expand core American industries,” leading to conflicting interpretations.

U.S. President Donald Trump holds a ″Foreign Trade Barriers″ document as he delivers remarks on tariffs in the Rose Garden at the White House in Washington on April 2. [REUTERS/YONHAP]

Lee Jae-min, a professor at Seoul National University School of Law, stressed that “ambiguous language like that used in the July 30 and Aug. 25 Korea-U.S. agreements could lead to misunderstandings.”

“This time, the terms must be clearly defined and documented in writing,” said Prof. Lee.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM WON [[email protected]]