WASHINGTON, D.C. — The protracted trade negotiations between the United States and South Korea appear to be nearing a breakthrough, with top officials from both nations expressing strong optimism ahead of the Asia-Pacific Economic Cooperation (APEC) summit later this month. U.S. Treasury Secretary Scott Bessent stated on Wednesday (Oct. 15, local time) that the agreement with Seoul is “about to finish up,” adding that the "devil's in the details, but we are ironing out the details."
The Treasury Secretary’s remarks, made during an interview with CNBC, signal a significant advance in the follow-up talks on the framework deal reached in July. The core issue of the deadlock has been the structure of South Korea's massive $350 billion investment fund pledged to the U.S. in exchange for a reduction in Washington's planned "reciprocal" tariffs on Korean goods from 25 percent to 15 percent.
All-Out Diplomacy Ahead of APEC
In a display of "all-out diplomacy," the Lee Jae-myung administration has mobilized its entire senior economic and trade negotiation team to Washington, D.C., for a final round of high-stakes talks.
The economic delegation includes:
Deputy Prime Minister and Finance Minister Koo Yoon-cheol, who is expected to meet with Secretary Bessent.
Presidential Chief of Policy Kim Yong-beom.
Minister of Trade, Industry and Energy Kim Jung-kwan.
Trade Minister Yeo Han-koo.
Kim Yong-beom and Kim Jung-kwan are slated to hold meetings with U.S. Commerce Secretary Howard Lutnick. This concentrated diplomatic push is seen as the last high-level effort to finalize the agreement before U.S. President Donald Trump visits South Korea for the APEC Economic Leaders’ Meeting in Gyeongju. Secretary Bessent also indicated that a major trade announcement would likely coincide with President Trump's Asia tour.
Key Hurdle: $350 Billion Investment Funding
The main stumbling block has been Seoul's concern that a large, upfront cash injection—reportedly demanded by the U.S. in the initial talks—would risk foreign exchange market instability, given the scale of the investment relative to Korea's foreign reserves. Seoul has consistently advocated for minimizing the direct cash portion, favoring a structure primarily built on loans, credit guarantees, and local currency-based investments.
In a recent development, a senior government official in Seoul confirmed that the U.S. has provided a “meaningful alternative” to its previous demands, and that a revised proposal is currently under review. This alternative is believed to address Seoul's concerns about the stability of its foreign exchange market, potentially including a mechanism such as a currency swap arrangement with the U.S. Federal Reserve.
The Presidential Office maintains that the two sides are in the process of "narrowing differences on major issues." The resolution of this tariff and investment dispute has become a crucial litmus test for the Korea-U.S. economic alliance, which is deepening amid global efforts to secure critical supply chains in semiconductors and other advanced technologies. Both nations are under pressure to reach an accord that serves as a cornerstone for President Lee and President Trump's expected bilateral summit during the APEC gathering.
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