Chinese newspaper reporter Taylor
Hello everyone, look forward to a major event in South Korea.
South Korea is unable to pay $350 billion in cash under trade agreements
A senior South Korean official said on Sunday that South Korea could not offer the United States $350 billion in cash in exchange for tariffs.
National Security Advisorby Wei San LoIn a TV interview, he said: "Our position is not a negotiation strategy. This is not a level that we can afford objectively and realistically. We can't pay $350 billion in cash."
Earlier, the United States and South Korea reached an agreement on a $350 billion investment commitment in July as part of a broader trade agreement to reduce US tariffs from 25% to 15%. But the two sides still disagree on how to design the arrangement.
South Korean officials are seeking to buffer economic impacts through loans and bilateral exchange arrangements with the United States, noting that the amount is equivalent to more than 80 percent of its foreign exchange reserves.
According to reports, the U.S. Secretary of Commerce has told South Korea that the U.S. is more inclined to invest in cash than in loans.
The South Korean side said the government was exploring alternatives and hoped to make progress at the two leaders’ meeting at the APEC summit in Changzhou next month.
According to Yonhap News Agency, the South Korean Finance Minister said that he had concluded consultations with the US on the exchange rate issue, and relevant details will be announced soon; He also pointed out that this discussion is a different topic from the currency swap negotiation.
Negotiations in South Korea are in a standstill.
Earlier, the United States and South Korea agreed to set up a $350 billion investment fund, but the specific arrangements reached a deadlock.
Kim Jong-nam, director of the State Policy Chamber of the South Korean Presidential Office, said South Korea had stressed to the United States that it could not accept the same terms as Japan's $50 billion investment commitment last week, arguing that there was a gap in the size of the two economies and that it could have an impact on the foreign exchange market.
Kim said,"The environment faced by South Korea and Japan is fundamentally different", and mentioned Japan's currency swap arrangement and the reserve currency status of the yen.
He pointed out that while it is important to determine who makes investment decisions for the fund and how to distribute profits, for South Korea, the more pressing question is how to raise and manage $350 billion from the foreign exchange market.
The $350 billion fund is one of the core pillars of the trade agreement, which will keep the tariffs on imports from South Korea at 15 percent, but the two sides are still divided on how the fund works.