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2h ago

South Korea Rejects $350 Billion Upfront Cash as U.S. FX Understanding Nears

Seoul says a separate foreign‑exchange understanding with Washington will be announced soon.

U.S. President Donald Trump and South Korean President Lee Jae Myung meet in the Oval Office at the White House, in Washington, D.C., U.S., August 25, 2025. REUTERS/Brian Snyder/File Photo
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Overview

  • National security adviser Wi Sung-lac said Seoul cannot pay the $350 billion in cash and is seeking alternatives after July’s handshake linking tariff cuts to investment.
  • Talks remain at a deadlock over cash versus loans, control of the funds, and profit-sharing, with Korean media reporting Washington pushed a 90–10 profit split in the U.S.’s favor that Seoul rejects.
  • President Trump said the Korean commitment is “upfront,” and a Wall Street Journal report that Commerce Secretary Howard Lutnick asked for more cash and a higher total was disputed by Finance Minister Koo Yun-cheol.
  • Koo said foreign‑exchange consultations with the U.S. are finalized and will be announced soon, while officials clarified the understanding is separate from a currency swap.
  • A presidential spokesperson said the U.S. agreed South Korea is not a currency manipulator, as President Lee Jae Myung warns a massive cash outflow without swap backstops risks a crisis and markets show strain.