U.S. Treasury Secretary Scott Bessent said on the 15th (local time) that follow-up trade talks with Korea have "entered the final stage."
Minister Bessent said in an interview with CNBC that "the devil is in the details, but we are working through the details." This is read as meaning they are fine-tuning specifics. It is also possible that a settlement of the follow-up talks, which have continued for a little over two months, is imminent.
Minister Bessent did not reveal the specific contents of the "details." However, given that a key point between Korea and the United States was the $350 billion investment in the United States, it appears they discussed the composition and method of the investment package and foreign exchange market safeguards in connection with large-scale dollar funding.
In the tariff talks concluded on Jul. 30, the two countries agreed to lower the U.S.-announced reciprocal tariff on Korea from 25% to 15% and for Korea to carry out a total of $350 billion in investment in the United States. However, they failed to narrow the gap on how to implement the U.S.-bound investment.
Korea's plan was to make equity investment, which puts up cash directly, at about 5% of the $350 billion, do most of the rest through Credit guarantees with no direct cash movement, and fill the remainder with Loans. However, the United States is demanding a "blank check for investment" similar to Japan's approach.
Minister Bessent also said that officials from both Korea and the United States will hold a separate meeting on the sidelines of the International Monetary Fund (IMF) and World Bank annual meetings in Washington this week. In particular, Presidential Chief of Staff for Policy Kim Yong-beom and Ministry of Trade, Industry and Energy Minister Kim Jung-kwan, who are leading the talks, will visit Washington, D.C., on the 16th to meet with Commerce Secretary Howard Lutnick. Minister Lutnick is considered the U.S. "key man" in these talks.
Deputy Prime Minister and Ministry of Economy and Finance Minister Koo Yun-cheol also visited Washington, D.C., the same day to attend the Group of 20 (G20) finance ministers and Central Bank governors' meeting and the IMF and World Bank annual meetings. He is expected to meet Minister Bessent to provide support from the sidelines. Trade Minister Yeo Han-koo, head of the Trade Negotiations Office, also traveled to the United States to meet Jamieson Greer, the U.S. Trade Representative (USTR).
With the entire economic and trade line for the United States mobilized and Minister Bessent's remarks coming the same day, there is a sense that, ahead of the Korea-U.S. summit planned on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit later this month, the two sides may reach a final agreement to sign a memorandum of understanding (MOU) on investment. In fact, on the 11th of last month and on the 4th, Minister Kim met Minister Lutnick and presented the United States with a "revised proposal" that included an unlimited currency swap. At the time, Minister Lutnick was also said to have expressed some sympathy with Korea's concerns about foreign exchange market instability.
Meanwhile, Minister Bessent said in the interview that he plans to meet Chinese Vice Premier He Lifeng of the China State Council before attending the APEC summit. He said, "As far as I know, President Trump also plans to attend APEC," adding, "Relations between the two sides are very good. The reason this situation has not greatly worsened is the level of trust between the two leaders, and U.S.-China relations are sustainable."
When asked about the U.S.-China trade conflict, which shows signs of escalation with measures such as a 100% additional tariff by the United States in response to China's export controls on rare earths, Minister Bessent said, "China is trying to construct a logic that 'the United States did A, B, and C, so we had no choice but to do D,' but that is not true," adding, "We have stronger tools than the rare earth export controls China plans to implement. To be clear, this is an issue of China versus the world."
Minister Bessent went on to say, "We plan to discuss this with European allies, Australia, Canada, India, and democratic countries in Asia (through this IMF meeting week). We will prepare a comprehensive collective response," adding, "We do not want to harm their economies."
He continued, "Part of the current investment boom is because President Trump wanted reshoring (bringing production facilities back home). Part of reshoring is strategic," adding, "We do not want decoupling from China, but these rare earth export controls were a signal of decoupling."
He added, "I remain optimistic despite this situation," and "We are communicating at the highest level (with the Chinese side) at present. There have been multiple contacts. Fortunately, China dispatches large delegations everywhere."