WASHINGTON, D.C. – South Korea and the US have entered the final stretch of negotiations in Washington to conclude a sweeping investment and trade package worth $350 billion, in what officials described as the “last-mile” talks before a potential announcement at the upcoming APEC summit in Gyeongju later this month.
Chief Presidential Policy Officer Kim Yong-beom and Industry and Trade Minister Kim Jung-kwan held a two-hour meeting on Thursday afternoon with US Commerce Secretary Howard Lutnick at the Commerce Department.
Korea’s chief trade negotiator Yeo Han-koo also attended the session.
Korea’s top economic and trade officials, including Finance Minister Koo Yoon-cheol, are in Washington to narrow remaining differences with the US over the contentious tariff and investment package.
The talks center on the composition of the massive investment package, particularly the balance between equity stakes, loans and guarantees, amid diverging views on how much of the funding should be in cash.
Washington has pushed for as large a direct cash contribution as possible, while Seoul is seeking to limit up-front exposure and prioritize commercially viable investments.
PROLONGED UNCERTAINTY COULD PROVE DAMAGING
Officials said both sides now recognize that prolonged uncertainty over the deal could prove damaging as global trade tensions escalate, supply chains remain vulnerable to Chinese rare earth restrictions and currency volatility intensifies.
Asked by reporters if there’s any progress in talks, Kim Yong-beom declined to disclose whether an agreement was within reach, saying only that “we had a sufficient and productive discussion.”
The two sides are expected to continue talks through the weekend, with another round of ministerial-level meetings possible before a final deal is presented to both leaders, sources said.
“There are still a few technical and structural issues to iron out,” said a senior Korean trade official. “But both sides share a sense of urgency and want to wrap this up before APEC.”
The Korean economic chiefs also met White House budget director Russell Vought on Wednesday to discuss industrial cooperation under Seoul’s proposed MASGA, or Make American Shipbuilding Great Again, initiative, which aims to link the two countries’ shipbuilding and advanced manufacturing sectors.
Additional meetings with US Secretary of the Interior Doug Burgum and Deputy Assistant Secretary for Nuclear Fuel Cycle and Supply Chain Andrew Griffith are planned, focusing on Korea’s participation in the Alaska LNG project and expanded nuclear cooperation.
Seoul is said to be exploring ways to offset a reduced equity contribution by committing more resources to strategic sectors such as clean energy and nuclear technology – an approach that could help balance domestic fiscal constraints with Washington’s investment demands.
Analysts said the strategy also reflects Korea’s growing influence in the global supply chain realignment as China presses Seoul to maintain distance from Washington.
US SEEN SOFTENING STANCE ON UP-FRONT PAYMENT DEMAND
Finance Minister Koo, who is in Washington, D.C. for the IMF and World Bank annual meetings, signaled that the US may withdraw its earlier demand for the entire $350 billion investment to be paid “up front.”
Speaking to reporters at the IMF headquarters, Koo said he met with US Treasury Secretary Scott Bessent on the sidelines of the G20 finance ministers’ meeting.
“Secretary Bessent recognizes that maintaining stability in Korea’s foreign exchange market benefits both countries,” Koo said. “I believe he understands that an up-front payment of $350 billion is unrealistic and has likely conveyed that view to Commerce Secretary Lutnick.”
Asked whether that meant the US had effectively dropped its prepayment condition, Koo replied: “They seem to understand our position better now. That’s a good sign.”
Koo added that discussions over a potential Korea–US currency swap are underway.
“A (currency) swap could be one of several tools to ensure stability in our forex market, depending on how the negotiations conclude,” he said.
With less than two weeks before the APEC leaders’ summit in Gyeongju, both governments are under pressure to deliver a political win that reinforces the alliance’s economic dimension.
“Washington wants a firm, visible commitment,” said a Seoul-based economist. “Seoul wants flexibility. The question is whether they can find a formula that satisfies both, without unsettling Korea’s markets.’
US President Donald Trump is expected to visit Seoul from Oct. 29 to 30 for the APEC summit.
A bilateral summit between Trump and Korean President Lee Jae Myung is likely to take place during the visit, though details have yet to be finalized.
Trump could also have a meeting with Chinese President Xi Jinping, who is slated to attend the APEC summit.
By Sang-eun Lucia Lee, Ji-Eun Ha and Dae-Hun Kim
selee@hankyung.com
In-Soo Nam edited this article.
