【By Observer News, Xiong Chaoran】
Recently, Trump asked South Korea to invest 350 billion U.S. dollars in the United States. Although a verbal agreement was reached, it seems that South Korean President Yoon Suk-yeol has backed out. As of August this year, South Korea's foreign exchange reserves were 416.3 billion U.S. dollars. If this investment agreement is realized, South Korea's foreign exchange reserves will be almost exhausted. Yoon Suk-yeol explicitly stated that it would face a situation similar to what South Korea encountered in 1997.
On September 22 local time, South Korean President Yoon Suk-yeol will depart for New York, the United States, to attend the 80th session of the United Nations General Assembly and deliver a speech during the general debate. He will also become the first South Korean president to preside over an open debate of the UN Security Council. On September 19 local time, he gave an exclusive interview with Reuters before leaving and the interview was published on September 22.
In July this year, South Korea and the United States verbally reached a trade agreement, under which the United States will lower tariffs on South Korean goods, in exchange, South Korea will establish a 350 billion U.S. dollar fund for investment in the United States, to support South Korean companies expanding in the United States, with 150 billion U.S. dollars allocated for the shipbuilding industry. In addition, South Korean private enterprises have also pledged an additional 150 billion U.S. dollars in investments to the United States.
Yoon Suk-yeol candidly admitted that if South Korea accepts the U.S. demands in the current stalled trade negotiations without setting up safeguards, the South Korean economy might fall into a crisis comparable to the 1997 financial crisis. He said through an interpreter: "Without a currency swap agreement, if we withdraw 350 billion U.S. dollars as required by the United States and invest all the funds in the United States in cash, South Korea would face a situation similar to the 1997 financial crisis." He emphasized that due to the controversy over the way of investment, the agreement between South Korea and the United States has not yet been converted into written text.
After World War II, South Korea started its economic development relying on manufacturing and exports from the 1960s. It created the "Han River Miracle" in the 1980s, but in 1997, when the Asian financial crisis broke out, the country almost went bankrupt. That year, South Korea's export-oriented economy was greatly affected, leading to the collapse of key enterprises one after another, large-scale factory shutdowns, massive unemployment, continuous depreciation of the won, and the devaluation of people's assets, while prices soared due to inflation. At the beginning of October 1997, South Korea's total foreign exchange reserves were about 30 billion U.S. dollars, but it had a foreign debt of more than 110 billion U.S. dollars.
Other than discussing relations with the United States, Yoon Suk-yeol also mentioned South Korea's relationships with North Korea, China, and Russia in the interview. Like the former President Yoon Suk-yeol who has already stepped down, Yoon Suk-yeol believes that the military cooperation between North Korea and Russia poses a "major threat" to South Korea's security. However, he stated that a simplistic response to this issue cannot be taken, and it must be resolved through dialogue and coordination.
Furthermore, Yoon Suk-yeol grouped China, Russia, and North Korea into one "camp," and South Korea, the United States, and Japan into another "camp." He claimed that both "camps" are strengthening their alliances, and the confrontation and tension are escalating, with South Korea's geographical position making it possible to become the front line of conflict between the two sides. "This is a very dangerous situation for South Korea. We must find an exit to break out of the continuously escalating military tensions and find a path of peaceful coexistence."
Previously, U.S. President Trump also made comments on China, Russia, and North Korea. In response, Chinese Foreign Ministry Spokesperson Guo Jiajun stated that China invited foreign guests to attend relevant activities to commemorate the 80th anniversary of the Chinese People's War of Resistance Against Japanese Aggression and the victory of the World Anti-Fascist War, to work together with countries and people who love peace to remember history, honor the martyrs, cherish peace, and create a better future. "China's development of diplomatic relations with any country does not target a third party," he said.
South Korean President Yoon Suk-yeol interviewed by Reuters, Reuters
South Korean Companies in the U.S. Suffered Sudden Raids, Yoon Suk-yeol Responds
Reuters pointed out that before his trip to New York, Yoon Suk-yeol was "in good shape," but the trade and defense negotiations between South Korea and its military ally and major economic partner, the United States, overshadowed the "glow" of the South Korean president.
In late August, Yoon Suk-yeol visited the White House for his first face-to-face meeting with U.S. President Trump, and he said that although the two sides did not reach a joint statement or specific results at the time, he had established a solid personal relationship with Trump.
However, in early September, U.S. immigration enforcement agencies conducted a sudden raid on the South Korean Hyundai Motor and LG Energy Solution's joint battery plant in Georgia, arresting over 300 South Koreans and accusing them of violating immigration laws. This raid shocked South Korea.
Photos of the scene of the U.S. law enforcement raid on a South Korean factory, video screenshot
Regarding this, Yoon Suk-yeol stated that South Koreans were angry with the U.S. government's "strict" treatment of these workers and warned that this could make South Korean companies wary of investing in the United States.
Nevertheless, Yoon Suk-yeol simultaneously emphasized that this raid would not undermine the South Korea-U.S. bilateral alliance and expressed appreciation for Trump's willingness to allow these workers to stay. Yoon Suk-yeol said that he did not think this was intentional, and that it was the result of excessive actions by U.S. law enforcement agencies. "I don't think it was intentional. The United States has apologized for this incident, and we have agreed to seek reasonable measures. We are working on it."
The office of Yoon Suk-yeol has stated that the South Korean president has no plans to meet with Trump in New York, and trade negotiations are not part of the agenda for this visit to the United States.
Trade Agreement "Stuck", South Korea Still "Struggling"
It has been nearly two months since Trump announced the trade agreement between the U.S. and South Korea, but the two countries have yet to finalize the final document. For days, South Korean officials have been visiting the U.S. repeatedly, but there has been no significant progress.
U.S. Commerce Secretary Rutenberg previously stated that South Korea should follow the trade agreement reached by the U.S. and Japan. He pressured South Korea, saying that either accept the agreement or pay tariffs.
On September 16, the British Financial Times reported that the reason for the impasse in the U.S.-South Korea trade negotiations was because Seoul was resisting pressure from Washington and refusing to accept a "Japanese-style" trade agreement, which would let Trump decide where South Korea invests in the U.S.
The South Korean Central Daily reported that for Japan, which had "almost completely accepted" the U.S. requirements, the U.S. reduced its car tariffs to 15% starting on September 16 local time, while South Korean cars still faced a 25% tariff, potentially weakening the competitiveness of South Korean cars in the U.S. market.
When asked whether South Korea would withdraw from the trade negotiations, Yoon Suk-yeol said, "I believe that as an 'ally,' we can maintain a minimum level of rationality." Previously, South Korea proposed establishing a dollar swap mechanism to alleviate the impact of large-scale investments on the South Korean won market, but Yoon Suk-yeol did not disclose whether the U.S. might agree or whether this would be sufficient to move the agreement forward.
He said that South Korea is different from Japan, which has already reached a trade agreement with the United States. Tokyo's foreign exchange reserves exceed 820 billion U.S. dollars, more than twice that of South Korea, and the yen has a swap mechanism with the U.S.
On August 25, 2025, local time, U.S. President Trump delivers a speech at the Oval Office of the White House during a meeting with South Korean President Yoon Suk-yeol. Visual China
Yoon Suk-yeol said that the U.S. and South Korea have agreed in writing that any investment projects must be commercially viable, but implementing the details is extremely difficult. "Achieving detailed agreements that ensure commercial viability is the core task at present, but it is also the biggest obstacle," he added. He mentioned that the proposals at the working level have not ensured commercial viability, so it is difficult to bridge the differences.
Trump claimed that these investment projects would be "selected" by him and controlled by the U.S., meaning that the U.S. would have the dominant control over the investment funds. However, Yoon Suk-yeol's policy advisor, Kim Yong-bum, head of the Policy Bureau of the South Korean Presidential Office, said in July that South Korea had increased safety mechanisms to reduce financing risks, including supporting projects with commercial viability rather than providing funds unconditionally.
Regarding the defense issue, Yoon Suk-yeol said that there was no disagreement between South Korea and the United States on increasing South Korea's contribution to its own defense. Currently, 28,500 U.S. soldiers are stationed in South Korea, but the U.S. hopes to separate the security and trade negotiations. When asked whether the negotiations might drag into next year, Yoon Suk-yeol said, "We should end this unstable situation as soon as possible."
On the peninsula issue, Yoon Suk-yeol seeks to ease the tense relationship with North Korea, but he candidly admitted that he is not optimistic about restarting inter-Korean dialogue in the short term.
This article is an exclusive article from Observer News, and it is not allowed to be reprinted without permission.
Original: https://www.toutiao.com/article/7552713212127429139/
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