October 17, 2025
SEOUL – Negotiations between South Korea and the United States over a $350 billion investment fund have entered a decisive phase, with both sides expressing increasing confidence that a breakthrough could be imminent.
According to senior government officials, Finance Minister and Deputy Prime Minister Koo Yun-cheol, who is in Washington for the G20 Finance Ministers’ Meeting and the IMF-World Bank annual gatherings, will join Presidential Policy Chief Kim Yong-beom and Industry Minister Kim Jeong-kwan in a visit to the White House Office of Management and Budget on Thursday.
Koo has rearranged his Washington schedule to accommodate the meeting.
The visit to the OMB, an agency under the Executive Office of the President that oversees US federal budget and policy coordination, is seen as a signal that the two governments are fine-tuning the administrative and legal language of the tariff and investment agreement, a procedural step that typically precedes final approval.
The OMB talks mark the culmination of months of negotiations to finalize how to execute Seoul’s pledged $350 billion investment package, part of a trade agreement that would lower US tariffs on Korean exports from 25 percent to 15 percent.
While a broad framework was reached in July, a final agreement has been delayed by disputes over how the fund should be structured and safeguarded against currency volatility.
Seoul favors a flexible approach, centering on loans, guarantees and a foreign-exchange safety mechanism, whereas the US has demanded immediate cash payments.
Adding complexity, recent comments from National Security Adviser Wi Sung-lac showed ongoing challenges related to a currency swap agreement, an element considered essential for market stability and signaling strategic alignment.
“We have proposed an unlimited currency swap with the US, but there has been no progress,” Wi told reporters on Thursday. “I don’t place too much importance on it or expect too much,” he said, indicating that negotiations still face hurdles.
His remark contrasts with the more optimistic tone expressed by other top officials directly involved in the negotiations.
Before departing for Washington, presidential policy chief Kim said the two sides were “making positive progress,” noting that coordination among US agencies, including the Treasury, Commerce Department and US Trade Representative, “appears much closer than before.”
“It’s an appropriate time for all of us to be in one place to fine-tune our stance and accelerate negotiations,” he said.
Industry Minister Kim, who leads the trade track, added that differences over foreign-exchange safeguards have “narrowed considerably,” with both sides now focused on technical details.
US President Donald Trump has demanded that the funds be paid “up front” through direct cash investments in the US, while Seoul has resisted, warning that such an approach could destabilize the foreign-exchange market by sharply increasing dollar demand.
Instead, Korea has proposed a hybrid structure centered on loans and guarantees, coupled with a foreign-exchange safety mechanism to stabilize the won.
Options under discussion include an unlimited currency-swap line with the Federal Reserve or a special-purpose vehicle backed by Korea’s Foreign Exchange Stabilization Fund to phase in funding gradually.
In Washington, Treasury Secretary Scott Bessent said Wednesday he expected a breakthrough “within 10 days.”
“We are about to finish up with Korea,” he told CNBC. “The devil’s in the details, but we are ironing out the details.”
When asked about a potential swap line, Bessent said the decision rests with the Fed, but added, “If I were Fed chair — and I’m not — Korea would already have a swap facility, as would Singapore.”
Presidents Lee Jae Myung and Trump are expected to meet during the US president’s visit to Korea on Oct. 29 and Oct. 30. Both governments view the Asia-Pacific Economic Cooperation summit, beginning Oct. 27 in Gyeongju, as an ideal opportunity to formalize the agreement, although Trump has not yet confirmed his attendance.
“There’s no fixed deadline,” Kim said. “But since both leaders will be together at APEC, there’s a shared understanding to use that opportunity.”
