South Korean President Lee Jae Myung said Friday that US demands for $350 billion in investments are financially impossible and could collapse his country’s economy, comparing the potential impact to the devastating 1997 Asian Financial Crisis.
“Without a currency swap, if we were to withdraw $350 billion in the manner that the US is demanding and to invest this all in cash in the US, South Korea would face a situation as it had in the 1997 financial crisis,” Lee told Reuters in an exclusive interview.
The blunt rejection signals South Korea’s breaking point with the Trump administration’s demands that Seoul calls economically destructive.
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South Korea agreed in July to invest $350 billion to reduce tariffs from 25% to 15%. But Trump’s insistence on US ownership and personal control over project selection has created an impasse, according to Lee.
“Making $350 billion work financially” has become the central deadlock in negotiations, the South Korean leader stated.
The dispute has intensified following a September 4 immigration raid that detained over 300 Korean workers at a Hyundai-LG battery plant in Georgia, with Lee warning that Korean companies are now reconsidering all US expansion plans.
South Korea’s foreign exchange reserves total $410 billion — meaning the US demands would require deploying nearly all national reserves, a move Lee called economically catastrophic.
Trade Minister Yeo Han-koo’s Washington mission this week ended without a breakthrough, highlighting how far apart the two allies have drifted.
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