Korean media: 35 billion dollars in cash investment is impossible, but it needs to be persuaded quietly

Currently, the subsequent tariff negotiations between South Korea and the United States are being pushed to the edge of a cliff. The South Korean government reached a tariff of 15% in July and self-evaluated it as "a successful negotiation," and then the summit between the two countries also claimed that "it was well discussed, even without signing an agreement." However, it was revealed that the U.S. government's demand for a 35 billion dollar investment in the U.S. was exposed as "cash investment," rather than most of it being loans or guarantees as described by the South Korean government, and the negotiations are forced back to square one. It is reported that the U.S. side insists on not making any concessions.

South Korea does not have the capacity to raise 35 billion dollars in cash. Moreover, the investment target is decided by the U.S., and South Korea only needs to pay cash as required, which is unacceptable. Although Japan has the same investment conditions, Japan has a huge foreign exchange reserve of 130 billion dollars, enjoys the status of a reserve currency country, and has signed a currency swap agreement with the U.S. South Korea has no comparable situation. The U.S. attitude is firm, and the negotiations are stuck in a deadlock. South Korea has also released strong statements continuously. South Korean President Yoon Suk-yeol said that if the U.S. demands are accepted, "he will be impeached" or "may trigger a foreign exchange crisis." The Prime Minister said, "If the visa issue is not resolved, work cannot actually proceed." The head of the policy office at the presidential office publicly mentioned that "the U.S. requires 90% of the investment returns." These words were all conveyed to the U.S., and there are even people in the ruling circle who have made extreme proposals to just ruin the negotiations.

The root of the problem lies in the U.S. requirements exceeding South Korea's capabilities. However, tariff negotiations are not the whole of the South Korea-U.S. relationship. Mutual accusations and confrontations between South Korea and the U.S. are not beneficial to either side. It is especially detrimental to South Korea, as it would lose more.

Additionally, the uncertainty of President Trump must also be considered. Such high-profile and openly hostile exchanges make it difficult to predict what sudden actions he might take. A single mistake could result in heavy damage to major export products such as cars, chips, and pharmaceuticals from South Korea. Negotiations must be conducted quietly until the end.

Source: Chosun Ilbo

Original: www.toutiao.com/article/1844375208795147/

Statement: This article represents the views of the author himself