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South Korean President Lee Jae Myung speaks throughout a South Korea-U.S. enterprise roundtable at The Willard Lodge in Washington, D.C., U.S., August 25, 2025.
Annabelle Gordon | Reuters
South Korea’s financial system might fall into crises rivaling its 1997 meltdown if the federal government accepts present U.S. calls for in stalled commerce talks with out safeguards, President Lee Jae Myung informed Reuters.
Seoul and Washington verbally agreed to a commerce deal in July through which the U.S. would decrease President Donald Trump’s tariffs on South Korean items in change for $350 billion in funding from South Korea, amongst different measures.
They’ve but to place the settlement on paper due to disputes over how the investments can be dealt with, Lee stated.
“With no foreign money swap, if we have been to withdraw $350 billion within the method that the U.S. is demanding and to speculate this all in money within the U.S., South Korea would face a scenario because it had within the 1997 monetary disaster,” he stated by a translator.
In an interview in his workplace on Friday, Lee additionally spoke about an enormous U.S. immigration raid that detained lots of of Koreans, in addition to Seoul’s relations with rival North Korea, neighboring big China and Russia.
However commerce and protection talks with the U.S., South Korea’s army ally and a prime financial accomplice, are overshadowing a visit Lee makes from Monday to New York, the place he’ll handle the United Nations Common Meeting and be the primary South Korean president to chair a gathering of the Safety Council.
Praises Trump dealing with of Hyundai raid
Lee, a liberal, took workplace in a June snap election after his conservative predecessor, Yoon Suk Yeol, was faraway from workplace and jailed for briefly imposing martial legislation. Lee has sought to calm the nation and its financial system and stated he plans to make use of his U.S. go to to inform the world that “democratic Korea is again.”
Detainees are made to face in opposition to a bus earlier than being handcuffed, throughout a raid by federal brokers the place about 300 South Koreans have been amongst 475 folks arrested on the website of a $4.3 billion mission by Hyundai Motor and LG Power Resolution to construct batteries for electrical vehicles in Ellabell, Georgia, U.S., September 4, 2025 in a nonetheless picture taken from a video.
U.s. Immigration And Customs Enforcement | Through Reuters
Lee met Trump for his or her first summit in August, saying he had constructed a robust private tie with the U.S. chief, regardless of not agreeing on a joint assertion or concrete announcement.
This month Trump’s administration rocked South Korea with the arrest of greater than 300 South Korean employees at a Hyundai Motor battery plant in Georgia, with federal officers accusing them of immigration violations.
Lee stated South Koreans have been naturally angered by the “harsh” remedy of the employees – the Trump administration revealed photographs of them in shackles – and has warned it might make firms cautious of investing in the US.
However he stated the raid wouldn’t undermine the bilateral alliance, praising Trump for providing to let the employees keep. Lee stated he didn’t consider it was directed by Trump however was the results of overzealous legislation enforcement.
“I don’t consider this was intentional, and the U.S. has apologized for this incident, and we’ve got agreed to hunt cheap measures on this regard and we’re engaged on them,” he stated.
Lee’s workplace says there isn’t any plan for him to fulfill Trump in New York and that the commerce talks will not be on the go to’s agenda.
Stumbling block in commerce talks
Commerce Secretary Howard Lutnick has stated South Korea ought to comply with Japan’s cope with the US. He stated Seoul both wants to just accept the deal or pay the tariffs, utilizing the Trump administration’s depiction of overseas governments paying the levies, that are as an alternative paid by U.S. importers.
U.S. Secretary of Commerce Howard Lutnick and South Korean President Lee Jae Myung take part in a South Korea-U.S. enterprise roundtable at The Willard Lodge in Washington, D.C., U.S., August 25, 2025.
Annabelle Gordon | Reuters
Lee, requested if he would stroll away from the deal, stated: “I consider that between blood allies, we will preserve the minimal quantity of rationality.”
South Korea has proposed a overseas change swap line with the U.S. to scale back the shock of the investments on the native marketplace for the gained foreign money. Lee didn’t handle how seemingly the U.S. was to agree or whether or not that may be sufficient for the deal to go ahead.
He stated South Korea is completely different from Japan, which struck a commerce cope with the U.S. in July. Tokyo has greater than double South Korea’s $410 billion overseas change reserves, a global foreign money within the yen and a swap line with the US, Lee stated.
Seoul and Washington have stated in writing that any funding initiatives have to be commercially viable, however figuring out the main points is proving tough, he stated.
“Reaching detailed agreements that assure business reasonableness is now the central job – but it additionally stays the largest impediment,” Lee stated. Proposals throughout working-level talks present no assurance of business viability, making it laborious to bridge the hole, he stated.
Trump says the investments might be “chosen” by him and managed by the U.S., that means Washington would have discretion over the place the cash might be invested.
However Lee coverage adviser Kim Yong-beom stated in July that South Korea had added a security mechanism to scale back financing threat, together with supporting commercially possible initiatives fairly than offering unconditional monetary help.
Lee stated South Korea and the US don’t disagree on growing Seoul’s contributions towards its personal defence, bolstered by 28,500 U.S. troops on the Korean peninsula, however that Washington desires to maintain safety and commerce talks separate.
“We should always finish this unstable scenario as quickly as attainable,” he stated, when requested whether or not talks might lengthen into subsequent 12 months.
Tensions with North Korea, China, Russia
Lee has sought to scale back tensions with nuclear-armed North Korea. Pyongyang has rebuffed the South’s overtures, and Lee stated he was not optimistic concerning the prospect of inter-Korean talks in the interim.
Throughout their assembly, Lee inspired Trump to attempt to meet once more with North Korean chief Kim Jong-Un throughout Trump’s journey subsequent month for an Asia-Pacific summit Lee will host within the South.
Lee informed Reuters his authorities doesn’t have detailed data on the standing of any talks between Washington and Pyongyang. “It’s our judgment that they aren’t partaking in concrete conversations,” he stated.
He stated he shares his predecessor Yoon’s view that North Korea’s army cooperation with Russia is a big risk to South Korea’s safety. However he stated it’s not sufficient to reply in a simplistic strategy to the problem, which have to be addressed by dialogue and coordination.
The North Korean chief and Russian President Vladimir Putin stood shoulder to shoulder this month in Beijing when Chinese language President Xi Jinping hosted them at a large army parade and summit.
On this pool {photograph} distributed by the Russian state company Sputnik, (L-R) Russia’s President Vladimir Putin walks with China’s President Xi Jinping and North Korea’s chief Kim Jong Un earlier than a army parade marking the eightieth anniversary of victory over Japan and the top of World Battle II, in Beijing’s Tiananmen Sq. on September 3, 2025.
Sergey Bobylev | Afp | Getty Photographs
Lee stated there’s growing confrontation between a socialist camp of nations and a capitalist, democratic camp that features Seoul, and South Korea’s geography threatens to put it on the frontier of any battle with the opposite camp.
He stated there’s an escalatory spiral of rivalry and tensions the place South Korea, Japan and the US deepen cooperation and China, Russia, and North Korea work extra intently collectively. “It is a very harmful scenario for Korea, and we should discover an exit ramp out of the escalating army tensions,” Lee stated. “We should discover a manner for peaceable coexistence.”
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