October 7, 2025
SEOUL – South Korean Industry Minister Kim Jung-kwan said Monday that Seoul and Washington have reached a significant consensus over concerns about the impact of a $350 billion investment deal on Korea’s foreign exchange market, as the two sides are working to make progress in stalled tariff negotiations.
“Regarding the proposal we sent, I can say that we are narrowing differences, particularly on issues related to the foreign exchange market,” Kim told reporters at Incheon International Airport upon returning from New York, where he met US Commerce Secretary Howard Lutnick.
Kim met with Lutnick on Saturday (US time), for follow-up negotiations on Korea’s pledged $350 billion investment, which is intended to reduce Washington’s “reciprocal” tariffs from 25 percent to 15 percent.
The trade deal, initially struck in July, was broadly reaffirmed when President Lee Jae Myung and US President Donald Trump held their summit in Washington in August.
However, in the absence of a written contract, key details of the agreement — including how the fund will be structured and how profits will be shared — remain unsettled. Since then, Kim has met Lutnick several times, while Korea’s top trade chief, Yeo Han-koo, also traveled to Washington for talks with his US counterparts, but a final deal has yet to be reached.
At the center of the standoff is the investment structure. Seoul wants to reduce upfront equity commitments by using loans and guarantees from state-run financial institutions. Washington, by contrast, is pushing for a higher proportion of direct cash investment and wants control over project selection –- similar to the $550 billion deal it struck with Japan.
Seoul has also requested Washington to set up a currency swap to cushion the potential impact on its foreign exchange market, which could face volatility from the large-scale investment.
When asked whether progress was made on a currency swap arrangement, Kim said there had been discussion. “It wasn’t necessarily progress, but I think there was a certain degree of consensus on the impact of this deal on our foreign exchange market.”
On the possibility of an unlimited, Kim remained cautious. “I don’t know if it will take the form of an unlimited swap, but there was consensus (with Washington) that this deal poses a large, sensitive issue for the foreign exchange market.”
In regards to Trump’s earlier remarks describing Korea’s pledged investment as an “up-front” payment, Kim said that issue was not raised during his meeting with Lutnick.
Kim also noted that specific discussions have not yet covered how the investment package would be structured or where funds would be allocated.
On Sunday, Kim joined an emergency response meeting on US tariff deal, convened by the presidential office, via videoconference from the US. During the meeting, Kim briefed participants on his talks with Lutnick, and officials discussed ways to respond to the ongoing negotiations.
The presidential office said it would continue to engage in follow-up negotiations with the US, prioritizing the national interest.
Kim told reporters that additional talks with the US would happen soon, possibly before Trump’s visit to Korea for the Asia-Pacific Economic Cooperation summit in late October.
Trump is scheduled to attend the ASEAN summit in Kuala Lumpur from Oct. 26 to 28, followed by a Japan-US summit in Tokyo, before traveling to the Gyeongju for APEC meeting, where he is expected to hold a bilateral with Chinese President Xi Jinping.
