President Trump announces trade breakthrough with South Korea during Asia tour

President Donald Trump and South Korean President Lee Jae-myung finalized details of a fractious trade deal at a summit in South Korea on Wednesday, with the US president also expressing optimism about an impending summit with Chinese President Xi Jinping.

“We have a deal and it’s almost final,” Trump said at a dinner with Lee and other regional leaders on the sidelines of the Asia-Pacific Forum.

The allies announced a deal in late July that would allow South Korea to avoid the worst tariffs on U.S. imports by injecting $350 billion in new investment into the U.S. in exchange for lower tariffs.

But talks over the structure of those investments stalled, with both sides downplaying hopes for a deal during Trump’s visit.

Kim Yong-beom, South Korea’s presidential policy chief, told reporters, “The outlook was not bright last night, but there were dramatic developments this day,” but did not provide details.

Agreement on investment in the United States

Mr. Trump and Mr. Lee agreed to split the $350 billion in investment funds promised by the South Korean government into $200 billion in cash, with installment payments of up to $20 billion per year, Lee’s aides said. The remaining $150 billion will go toward investment in shipbuilding, which South Korea has pledged to help President Trump rebuild.

South Korea said the two countries agreed to split profits 50-50 and pursue only commercially viable projects before recouping the initial investment. U.S. Secretary of Commerce Howard Lutnick will lead an investment committee to evaluate potential projects.

The White House did not respond to requests for comment on the details of the trade deal with South Korea, which requires approval by South Korea’s parliament.

Arriving from Tokyo hours after North Korea test-fired a nuclear-capable cruise missile, President Trump received a warm welcome from Prime Minister Lee in the historic city of Gyeongju, which will host this year’s Asia-Pacific Economic Cooperation Forum.

A meeting with Mr Xi is scheduled for Thursday in the port city of Busan.

President Trump predicts ‘good outcome’ from meeting with Xi Jinping

Trump told reporters on his way to South Korea that he denied North Korea’s missile tests and said his focus was squarely on talks with Xi, the leader of the world’s second-largest economy.

“I actually think it’s going to be a very good outcome for our country and for the world,” President Trump said.

He added that he expected U.S. tariffs on imports of Chinese products to be lowered in exchange for Beijing’s commitment to curb exports of fentanyl precursor chemicals.

The Wall Street Journal reported that the United States could cut in half the 20% tariffs it currently imposes on Chinese products in retaliation for exports of these chemicals.

China’s Foreign Ministry said the meeting between the two leaders would “inject new momentum into the development of U.S.-China relations” and said Beijing was ready to work together toward “positive results.”

Trump was absent from the APEC plenary meeting and attended a dinner with Lee and other leaders on Wednesday. He was scheduled to meet with Mr. Xi before his departure on Thursday.

Negotiators from the world’s top two countries on Sunday quickly finalized a framework for a deal that would suspend U.S. tariff increases and China’s restrictions on rare earth exports, U.S. officials said. The news sent stock prices to record highs.

In a sign of a possible thaw, China has bought its first cargo of U.S. soybeans in months, Reuters exclusively reported on Wednesday, although the Chinese government has become more cautious about the prospects for a deal.

luxurious welcome

Mr. Lee wooed Mr. Trump with gifts and praise, presenting him with a gold crown and South Korea’s highest decoration, the Grand Order of Mugunghwa.

At the start of a working lunch topped with a “golden dessert,” Mr. Lee promised to increase defense spending, seeking to allay Mr. Trump’s concerns that America’s allies are not performing militarily.

He also called for the United States to allow nuclear fuel to be reprocessed to power submarines that could track North Korean and Chinese vessels for long periods of time. Under an agreement between the two countries, South Korea is prohibited from reprocessing without U.S. consent.

President Trump has promised to help South Korea “resolve” its problems with its nuclear-armed northern neighbor. The two sides are technically still at war after the 1950-53 war ended with an armistice rather than a peace treaty.

President Trump has repeatedly sought to hold a meeting with reclusive North Korean leader Kim Jong Un during this trip, but said Wednesday that the timing would not work out.

Mr. Kim, a close aide to Mr. Lee, said a fact sheet on the South Korea-US agreement on security and trade would be ready within days, and a memorandum of understanding containing details of the trade deal was nearing completion.

In contrast to the official welcome, hundreds of demonstrators gathered near the summit site for an anti-Trump rally, which also resulted in scuffles with police.

“World leaders and governments are busy using every possible diplomatic charm just to flatter President Trump and persuade him to cut U.S. tariffs by a few percentage points,” said Kwon Yong-guk, a former presidential candidate from a small left-wing South Korean party who attended the rally. “How absurd!”