South Korea has dismissed US President Donald Trump’s demand for a US$350 billion upfront payment as part of a deal to cut tariffs, warning that such a massive cash outlay is unrealistic and could destabilise its economy.
Reuters reported that National Security Advisor Wi Sung-lac said on Sept 27 that Seoul cannot meet the US request for immediate payment, insisting the proposed contribution must take other forms.
“The position we’re talking about is not a negotiating tactic. It is objectively and realistically not a level we are able to handle. We are not able to pay US$350 billion in cash,” Wi told Channel A News.
In July, Trump and South Korean President Lee Jae Myung reached a handshake deal to reduce US tariffs on South Korean goods from 25% to 15%. Under the agreement, Seoul pledged US$350 billion toward US projects but structured through loans, guarantees and equity investments, not a lump-sum payment.
Trump, however, claimed earlier this week that the investment would be made “upfront”, alongside similar figures he cited from Japan, sparking concern in Seoul.
Officials have balked at US demands for control over the funds, leaving talks at a standstill. Lee warned that a full cash payment, even with US$410 billion in reserves, could trigger a financial crisis without safeguards such as a currency swap.
Wi said Seoul is exploring alternative arrangements and hopes to finalise terms at the Asia-Pacific Economic Cooperation summit next month, which South Korea will host and Trump is expected to attend.
The standoff highlights growing friction between Washington and one of its key Asian allies as Trump pushes for larger financial commitments from trade partners in exchange for tariff relief.
