Disagreement over $350 billion package 'shadows' US-Korea summit?

This is the next stop on Mr. Trump's Asian tour, after reaching trade and security agreements in Malaysia and Japan. According to international media, President Trump's two top priorities in South Korea are: urging Seoul to complete a $350 billion investment package in the US and arranging another summit with North Korean leader Kim Jong-un. However, analysts say Mr. Trump's goals in Seoul may be more difficult to achieve than his previous stops.

Deadlock over $350 billion investment package

The biggest obstacle now is the negotiations on the $350 billion investment package, which is considered a condition for the US to reduce tariffs on Korean imports from 25% to 15%. The fundamental disagreement lies in the form of the investment package. On the US side, President Trump asked Seoul to pay the entire amount "upfront" in the form of cash or equity. Meanwhile, on the Korean side, President Lee Jae-myung's administration said that most of the money is planned to be spent in the form of loans and loan guarantees for Korean companies to set up new production and business facilities in the US.

South Korean President Lee Jae-myung warned that such a large “upfront” cash payment could destabilize the country’s financial markets. Kim Sang-woo, a former politician and current board member of the Kim Dae-jung Peace Foundation, pointed out that the $350 billion figure was equivalent to about 6.5% of South Korea’s GDP and that cash payments could have a “huge negative impact on financial stability.”

Frictions in alliance relations

Mr Trump's visit comes amid some tensions in the US-South Korea alliance. Protests have been held outside the US Embassy in Seoul in recent days. Some in South Korea fear the country is being forced into trade deals and fear Mr Trump could again raise the issue of withdrawing US troops if his demands are not met.

In addition, public opinion in South Korea is still indignant after the US Immigration and Customs Enforcement (ICE) raided a Hyundai factory in Georgia (USA) in September, causing more than 300 Korean workers to be detained before being deported back to their home country.

Professor Hyobin Lee of Sogang University (Seoul) told DW that under the Trump administration, "there is a widespread perception that the alliance is being exploited for unilateral economic gain." However, Ms. Lee also said that the current South Korean administration is expected to negotiate in a "more assertive and confident" manner, prioritizing economic interests and strategic autonomy.

Prospects for US-North Korea summit remain open

Besides the economic issue, another focus of the visit is the possibility of resuming dialogue with North Korea. President Lee Jae-myung is expected to hold a bilateral summit with Mr. Trump on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in Gyeongju.

On his way to Asia, President Trump has repeatedly expressed his desire to meet with leader Kim Jong-un, affirming that he is "ready" if Kim wants to. However, analysts are cautious about the possibility of a US-North Korea summit. The last meeting between the two leaders was in June 2019 at Panmunjom.

Experts point out that the current context has changed, especially after North Korea signed a military and trade alliance with Russia, which helped ease the pressure of international sanctions. Mr. Kim Sang-woo analyzed that Mr. Trump seemed to be "trying to promote the visual image" of a meeting rather than making substantive offers. According to him, this "will not be enough to convince" the North Korean leader.