The United States and South Korea have advanced in trade negotiations, with talks and ceremonies that included the presentation of a gold medal and crown to U.S. President Donald Trump, detailing the $350 billion that will be invested in the U.S. economy.
Both were gifts from President Lee Jae-myung, the last stop on Trump’s recent Asian tour, where he called for flattery as Washington and South Korea work to flesh out economic commitments.
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Both sides say they have made progress (Mr. Trump said things are “almost final”), but no agreement has yet been signed. According to Kim Yong-beom, President Lee’s chief of staff for policy, the framework includes phased investment, cooperation in shipbuilding, and a reduction in President Trump’s tariffs on South Korean car exports. The White House did not respond to requests for comment.
Kim said the two countries had agreed to keep reciprocal tariffs at 15% since August, and also agreed to apply that rate to cars and auto parts, South Korea’s biggest exports to the United States. Cars and parts are subject to a 25% tariff, putting automakers such as Hyundai and Kia at a disadvantage against their competitors in Japan and Europe, which face 15% tariffs.
There was no immediate confirmation on these points from U.S. officials, but after a day of praise for the visiting U.S. president, it was clear that progress had been made on difficult issues.
There was a special lunch menu with American beef and golden decorated brownies. A band played Trump’s election song “YMCA” as he stepped off Air Force One. Lee told him, “You really made America great again.”
Mr. Trump can be temperamental and demanding, but he also has a soft spot for arrogance and circumstance. He was particularly impressed by the choreographed display of colorful flags while walking the red carpet.
“It was kind of a spectacle, some beautiful sights,” Trump told Lee during the meeting. “It was so perfect and the finish was perfect.”
Earlier in the day, President Trump even softened his rhetoric about international trade, which he always uses in predatory terms to mean someone is trying to steal from the United States.
“The best deal is the one that works for everyone,” he said at a business forum.
Korea risks
President Trump was visiting while South Korea was hosting the annual Asia-Pacific Economic Cooperation (APEC) summit in the historic city of Gyeongju. He previously stopped by Japan to bond with the new prime minister and attended the Association of Southeast Asian Nations summit in Malaysia.
The Republican president is trying to strike a trade deal along the way, hoping to show Americans worried about the job market and watching the federal government shutdown extend into its fifth week that his confrontational approach with tariffs is paying off.
But South Korea has been particularly difficult to break through, with President Trump’s request for $350 billion in direct investment in the United States posing a challenge.
South Korean officials say hoarding cash could destabilize their economy, so they want to offer loans or loan guarantees instead. The country would also need a swap line to manage the flow of currency to the United States.
After his meeting with Lee, President Trump said, “We have almost reached an agreement.” Details were not disclosed.
South Korea’s vice national security minister, Oh Hyun-joo, told reporters earlier in the week that negotiations were progressing “a little more slowly” than expected.
“We have not yet reached an agreement on the structure and format of the investment and how the profits will be distributed,” he said on Monday.
This contrasts with President Trump’s experience in Japan, where the government has been working to realize $550 billion in investments promised as part of a previous trade deal. U.S. Commerce Secretary Howard Lutnick announced concrete commitments of up to $490 billion at a dinner with business leaders in Tokyo.
Lee spoke at a business forum before Trump’s arrival and warned about trade barriers.
“Words like ‘cooperation’, ‘coexistence’ and ‘inclusive growth’ may ring hollow at a time when protectionism and nationalism are on the rise and countries are focused on immediate survival,” he said. “Paradoxically, however, it is in times of crisis like this that APEC’s role as a platform of solidarity shines even brighter.”
shower of gifts
Lee took office in June and had a warm meeting with President Trump at the White House in August, praising the renovation of the Oval Office and proposing to build a Trump Tower in North Korea.
President Trump took a similar approach during his visit on Wednesday. The gold medal awarded to President Trump represents the country’s highest honor, the Order of Mugunghwa, making him the first U.S. president to receive it.
President Trump said it was “extremely beautiful” and “I want to wear it right now.”
Next up is a replica of the crown of the Silla Kingdom, which existed from 57 BC to 935 AD. The original crown was discovered in a tomb in Gyeongju, the capital of the kingdom.
In addition to disagreements over trade, there have been other points of tension between Washington and South Korea this year. More than 300 South Koreans were detained during a US immigration raid on a Hyundai factory in Georgia in September, sparking feelings of anger and betrayal.
Mr Lee said at the time that companies were likely to be reluctant to make future investments unless the visa system was improved.
“If that is not possible, establishing a local factory in the United States would either be at a significant disadvantage or would be extremely difficult for us,” he said.
Asked about immigration raids on Monday, President Trump said he was “opposed to kicking them out” and said improved visa systems would make it easier for businesses to hire skilled workers.
Trump is also expected to hold close talks with Chinese leader Xi Jinping on Thursday while in South Korea. Washington and China have clashed over trade, but both sides have expressed a desire to ease tensions.
President Trump told reporters aboard Air Force One on Wednesday that he expects to lower tariffs targeting China over the flow of raw materials used to make the drug fentanyl.
“They’ll do everything they can,” he said. Trump added: “China is going to work with me.”
