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Deadlock over cash ratio of $350B U.S. investment casts doubt on APEC announcement

Published: 24 Oct. 2025, 19:12

Industry Minister Kim Jung-kwan speaks about the outcome of trade negotiations with the United States during a parliamentary audit by the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee at Yeouido in western Seoul on Oct. 24. [LIM HYUN-DONG]

Korea and the United States remain deadlocked over how much of Seoul’s promised $350 billion U.S. investment package should be in cash, Industry Minister Kim Jung-kwan said Friday, warning that the dispute could delay a joint statement at the upcoming Asia-Pacific Economic Cooperation (APEC) summit.

The two sides remain divided over the annual cash investment level, which currently ranges between $15 billion and $25 billion, Kim said before the National Assembly’s Trade, Industry, Energy, SMEs and Startups Committee.

“Korea believes the ratio should be smaller than the current level, while the United States wants it higher," he said, adding that reaching a joint statement at APEC remains uncertain.

“It’s hard to predict whether it will be possible, and we can’t be confident,” he said. “There are still a few issues where both sides have yet to reach a mutually satisfactory outcome.”

He stressed that Seoul is negotiating based on three principles: aligning both countries’ interests, ensuring commercial rationality and minimizing the impact on domestic financial and foreign exchange markets.

In July, Korea and the United States reached a provisional agreement to reduce Washington’s proposed tariffs on Korean goods from 25 percent to 15 percent, in exchange for Korea establishing a $350 billion investment fund for U.S. projects.

Seoul later announced that it would cap direct cash investment at 5 percent of the total and set the guarantee ceiling at $350 billion. But Washington has sought a larger portion of direct investment to be executed during U.S. President Donald Trump’s current term — similar to Japan’s arrangement — delaying the drafting of a fact sheet and joint statement.

On the U.S. request for “up-front” or prepaid investment, Kim said the demand has been “significantly eased.”

"The United States understands our concerns about potential side effects on Korea’s foreign exchange market, and the talks are proceeding based on that understanding," he said.

Presidential Director of National Policy Kim Yong-beom, left, and Industry Minister Kim Jung-kwan return to Korea through Incheon International Airport after completing additional discussions on Korea-U.S. tariff negotiations on Oct. 24. [YONHAP]

The two countries have reached a partial agreement on phased, long-term investment, but the annual cash investment level remains a major sticking point.

Washington has asked for $25 billion annually for eight years, totaling $200 billion, while Seoul is proposing $15 billion annually for 10 years, the Chosun Ilbo reported. Kim said that while he could not confirm specific figures, “talks are proceeding at roughly those levels.”

When asked whether foreign direct investment (FDI) from private Korean companies could be counted toward the government’s $350 billion commitment, Kim said, “FDI decisions are made autonomously by individual companies, and they are not currently being bundled with the government’s investment plan.”

Kim also dismissed speculation that U.S. agricultural imports, such as soybeans — which have been seeking new markets after losing a major buyer in China amid trade tensions — were part of the discussion, noting that they were no mentioned in his meeting with U.S. Commerce Secretary Howard Lutnick.

Some observers have suggested that enhanced nuclear energy cooperation could serve as a bargaining chip in the negotiations. During his Oct. 16 visit to Washington, Kim met with U.S. Energy Secretary Chris Wright to discuss expanding bilateral energy cooperation.

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 YEON-JOO [[email protected]]