South Korea has expressed its inability to pay $350 billion upfront as suggested by President Donald Trump for investment in the United States. Despite a handshake deal in July to lower US tariffs from 25% to 15%, South Korea clarified that the investment would be in the form of loans, loan guarantees, and equity, not a cash payment upfront. Seoul’s National Security Adviser emphasized that such a massive outlay could lead to a financial crisis for Asia’s fourth largest economy.

With South Korea unable to meet Trump’s upfront payment demand, discussions are ongoing to find alternative solutions. The deadlock in formalizing the trade deal stems from US demands for control over the funds. South Korean President Lee Jae Myung highlighted the risk to the economy without safeguards like a currency swap, raising concerns about plunging into a crisis. As both sides work towards finalizing the agreement, the upcoming APEC summit hosted by South Korea could be a crucial platform for resolving the impasse.