U.S. has stepped back from all-cash, upfront payment demand, says Korea’s industry minister

The United States has reportedly stepped back from its earlier demand that Korea implement its $350 billion investment package as an all-cash, upfront payment, a key sticking point in bilateral tariff negotiations, according to Korea’s industry minister after negotiations with U.S. counterparts over the weekend.

“The United States has accepted a significant portion of Korea’s position,” Industry Minister Kim Jung-kwan told reporters at Incheon International Airport after returning from the United States on October 20. “Discussions are progressing in a way that does not place a burden on Korea’s foreign exchange market.”

Kim was also asked whether the United States was still insisting on a full cash investment.

“Not to that extent,” he said. “If it had, the talks wouldn’t have been possible in the first place.” Kim explained that both sides “shared a common understanding” on the need to stabilize currency markets and were “working through the remaining details” based on that foundation.

Kim visited Washington on October 16, along with presidential policy chief Kim Yong-beom and Trade Minister Yeo Han-koo, to meet with U.S. Commerce Secretary Howard Lutnick. The two sides discussed implementation strategies for Korea’s investment package in the United States and the specifics of the ongoing tariff negotiations. Talks reportedly lasted more than two hours, reportedly into dinner.

Under the preliminary agreement reached in July, the Korean government has sought to pay only about 5 percent of the investment in equity and cover the rest with credit guarantees and loans. However, the U.S. side, under President Donald Trump, had been demanding a “blank check” model — where Korea would wire the funds in full to a special purpose vehicle within 45 days, with Trump reserving the right to designate the investment targets.

“The initial proposal from Washington would have put Korea’s foreign exchange market under serious stress, but the latest talks reflected those concerns,” according to the minister. “We’re now making a final push to find a structure that Korea can reasonably handle. I am prepared to return to the United States if necessary.”

Kim Yong-beom, who returned a day earlier, said on October 19 that the likelihood of an agreement being finalized by the upcoming APEC economic leaders’ meeting had grown. “We’ve resolved most of the issues. Only one or two remain,” he said.

Still, Kim Jung-kwan declined to specify the remaining points of contention, saying the government was internally reviewing the matter.

Meanwhile, the presidential office dismissed speculation that Korea and the United States had already agreed to sign a memorandum of understanding while leaving some issues unresolved. “That is not true,” the office said. “Nothing has been finalized yet.”

During his trip, Industry Minister Kim also met with officials from the U.S. Office of Management and Budget to discuss the MASGA — Make American Shipbuilding Great Again — initiative, and said bilateral discussions were underway to ensure balanced cooperation and investment between the two countries.

The government views the APEC meeting, scheduled to take place in Gyeongju later this month, as a key inflection point for the deal. “There is a shared understanding that a top-level agreement could be attempted during APEC,” Kim said. “But more important than the timing is reaching a deal that serves Korea’s national interest. We are ready to revisit Washington at any time.”

Lawmakers and trade experts believe that if the two sides can resolve major sticking points such as currency safeguards and investment structure, they will move on to final negotiations on the selection of investment targets and profit-sharing. With Trump scheduled to visit Korea on October 29, some speculate a top-down decision could be made during his stay.

BY BAE JAE-SUNG [yoon.soyeon@joongang.co.kr]