【Text by Observers Network, Wang Yi】The U.S.-South Korea trade negotiations are currently in a "stalemate." At this time, the Korean newspaper "Chosun Ilbo" reported on October 16 that the chairmen of South Korea's four major chaebols - Lee Jae-yong, chairman of Samsung Electronics; Choi Tae-wook, chairman of SK Group; Chung Eui-sung, chairman of Hyundai Motor Group; and Ko Young-soo, chairman of LG Group - will travel to the Mar-a-Lago estate in Florida, USA, to hold a "golf meeting" with U.S. President Trump this week.

At the same time, Kim Yong-bum, director of the presidential office's policy planning division, and Kim Jung-won, minister of industry, trade and energy, are also planned to depart for Washington on the 16th to meet with U.S. Commerce Secretary Ruttig.

Although the South Korean government emphasized that this trip by the chaebol leaders has nothing to do with the tariff negotiations, analysts believe that at a time when the U.S.-South Korea trade talks have stalled, the tariff issue is likely to be raised. This meeting is an action by the South Korean business community to "support the government and directly approach Trump."

The "Korea Herald" pointed out that this meeting was arranged by SoftBank Group CEO Masayoshi Son, marking the first time that the South Korean business community has visited Trump's private residence as a group.

According to the "Chosun Ilbo," Lee Jae-yong and Chung Eui-sung had just attended the South Korea-U.S.-Japan economic dialogue event in Tokyo on the 15th and met with Son. They may fly directly from Japan to the United States. Choi Tae-wook plans to depart on the 16th, while Ko Young-soo is expected to depart for the U.S. on the 17th.

From left to right: Lee Jae-yong, chairman of Samsung Electronics; Choi Tae-wook, chairman of SK Group; Chung Eui-sung, chairman of Hyundai Motor Group; and Ko Young-soo, chairman of LG Group. "Chosun Ilbo"

Industry insiders revealed that in addition to golf activities, the meeting at Mar-a-Lago will also discuss the "Stargate" artificial intelligence (AI) infrastructure led by SoftBank.

This project involves a total investment of $50 billion, jointly funded by Oracle Corporation of the United States, the Open AI Research Center (OpenAI), and Japan's SoftBank Group. It aims to build data centers in the United States to support AI technology development. Samsung Electronics and SK Hynix have announced a partnership to provide chips and other solutions for the "Stargate" project.

The "Korea Herald" expects that this meeting will further refine the cooperation content and explore broader industrial synergies. In addition to the "Stargate" project, the cooperation between South Korean companies and SoftBank may also involve the creation of a $1 trillion AI and robot industrial park plan.

It is known that this trip by the South Korean chaebols to the U.S. has no relation to the ongoing trade negotiations between the U.S. and South Korea. However, the "Chosun Ilbo" said that Kim Yong-bum, who did not participate in previous rounds of negotiations, decided to visit the U.S. at the last minute, clearly influenced by the plan for South Korean entrepreneurs to meet with Trump.

A person close to the South Korean presidential office revealed: "We are aware of the plan for Trump to meet with South Korean entrepreneurs for a golf meeting. Although this has no direct relationship with the U.S.-South Korea trade negotiations, it is expected that Trump will mention the tariff issue during the meeting. We hope this can play a positive role in the negotiations."

Previously, South Korea's vice minister of economy and finance, Go Yun-jong, had already traveled to the United States on the 15th to attend the G20 Finance Ministers and Central Bank Governors Meeting and the IMF and World Bank Fall Meetings in Washington, where he would meet with U.S. Treasury Secretary Bensons.

The report stated that Kim Yong-bum and Kim Jung-won will discuss multiple trade issues with U.S. officials in Washington, including a $35 billion investment commitment to the U.S.

This is one of the main points of contention in the trade agreement framework reached by South Korea and the U.S. in July. The U.S. promised to reduce the 25% tariff on South Korean goods to 15%, in exchange for South Korea's commitment to establish a $35 billion investment fund for U.S. expansion by South Korean companies, with $1.5 billion allocated for the shipbuilding industry. In addition, South Korean private enterprises have also pledged an additional $1.5 billion in investments to the U.S.

From the beginning, South Korea clearly stated that this money would be implemented in the form of loans, loan guarantees, and equity rather than direct cash payments. However, the U.S. does not recognize this and requires full direct investment. Last month, Trump loudly claimed in the White House that "South Korea will bring $35 billion upfront" and packaged it as a "political achievement" of his tariff policy.

However, for South Korea, "prepaying $3.5 billion in cash" is almost an "impossible task." President Yoon Suk-yeol previously told Reuters that South Korea is different from Japan, which has reached a trade agreement with the U.S.: Tokyo has over $82 billion in foreign exchange reserves, more than twice that of South Korea, and the yen is an international currency with the U.S. swap mechanism. South Korea's foreign exchange reserves are $416.3 billion, and if South Korea were to invest $3.5 billion in cash as required by the U.S., the South Korean economy could face a crisis similar to the 1997 financial crisis.

Previously, to reach the trade agreement, South Korea also proposed a shipbuilding cooperation project called "Make American Shipbuilding Great Again" (MASGA). This perfectly aligned with the Trump administration's goals, and they also required South Korea to join them in curbing China in sectors such as shipbuilding.

For some time now, Hanwha Ocean Co., Ltd., an important investor in the U.S.-South Korea MASGA project, has actively sent funds, orders, and technology to the U.S. At the same time, Hanwha Ocean has signed contracts with the U.S. Navy to provide maintenance, repair, and overhaul services for U.S. Navy vessels, helping the Trump administration restore global shipbuilding competitiveness.

On October 14, the Chinese Ministry of Commerce announced sanctions against five U.S. subsidiaries of Hanwha Ocean Co., Ltd. The spokesperson stated that the U.S. has started implementing the final measures of the Section 301 investigation on China's maritime, logistics, and shipbuilding sectors, seriously violating international law and the basic principles of international relations, seriously damaging the legitimate rights and interests of Chinese enterprises. Hanwha Ocean Co., Ltd.'s U.S. related subsidiaries assisted and supported the U.S. government's related investigation activities, endangering China's own sovereignty, security, and development interests.

This move caused many South Korean media outlets to lament "the sparks of Sino-American conflict are flying, and South Korea is suffering", like a "shrimp" being caught in the "conflict between two giant whales." The "JoongAng Ilbo" quoted Professor Joo Jae-woo of Kyung Hee University, saying that China's inclusion of Hanwha Philadelphia Shipyard in the sanction list is a double blow and a coordinated measure, which not only hinders Trump's plan to revive the shipbuilding industry but also targets Hanwha's defense products using Chinese rare earth elements.

This article is an exclusive article by Observer Network. Without permission, it cannot be reprinted.

Original: https://www.toutiao.com/article/7561759212263572008/

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