The contents of this article are written with authoritative materials and personal opinions. The source of the literature has been marked at the end of the article, so please know.
Recently, in a White House interview with Trump, the tone was quite tough, and directly said, Japan and South Korea have to pay $550 billion and $350 billion to the United States respectively, adding up to $900 billion!This is not a discussion, it is a clear “debt” and it is “pay first”!
He said, this money has to be in place quickly. meaning is very clear, no money, do not think about the following projects, tariff reduction is also exempt, special care is more a dream!
This is the routine of his "America First" policy in international investment. In the past, it was "increasing tariffs, withdrawing from groups, and attacking allies", but now it is "asking for money, investing hard, and paying first." Anyway, his logic has not changed. The United States cannot suffer losses, it must give priority, and others have to bleed.
What is the concept of $900 billion? It is almost equal to the GDP of a medium-sized economy for a year. According to the current exchange rate, Japan and South Korea have to take out so many dollars in a short time, which is equivalent to hollowing out more than half of their own foreign exchange reserves.
Japan is going to be $55 billion, and as one of the United States' ironest allies in Asia, there is not much to say. The Japan Bank for International Cooperation (JBIC) has long taken action and taken the lead in establishing an investment platform for the United States to "package" national credit through loans, guarantees, etc.
The Japanese government is taking risks. They did not pay money directly, but engaged in a mechanism of "official association" and invested money in the fields of technology, semiconductors and green energy in the United States.
This platform is actually a buffer, apparently obedient, and actually left a hand to ensure their own financial security.
South Korean President Li Keqiang doesn’t want to invest in the United States, but he knows very well that South Korea’s foreign exchange reserves are just $416.3 billion, only half that of Japan.If it were true, as Trump said, to get $350 billion in cash at a time would be equivalent to directly using 90 percent of the country’s households.
Lee did not hide himself when he was interviewed by Reuters. Directly speaking, this could lead to risks like the financial crisis of 1997.
The analysis of the central bank and the Ministry of Finance of South Korea is even more frightening, if the foreign exchange reserves massively leak, the yuan will surely be exhausted, domestic prices will surge, and the capital markets will be messy. In fact, the exchange rate of the Korean won against the US dollar fell below 1400 in September, and the market panicked.
Some investment institutions even think that South Korea's current finance is like "glass house", looking solid, in fact, once the money runs, the market confidence is gone, the South Korean economy in the short term can not slow down.
Faced with Trump's "advance payment", the South Korean Foreign Ministry and the Treasury department rushed to start emergency negotiations, not directly refusing, but instead wanting to delay a little, fight for a little time.
In August, Korea and the United States had drafted a Memorandum of Understanding (MOU), which described investment plans, project areas, funding structure, and so on.
The memorandum suggests that South Korea can use policy bank funding to guide private capital to invest in target projects in batches, rather than taking out so much cash at once. But the White House didn't buy this at all. Trump said coldly in an interview: “We don’t have memoirs, we’re going to see the money in the account!”
South Korea subsequently proposed a plan. Is it possible to release dollar liquidity through currency exchange to support investments, so that foreign exchange reserves are avoided?But the Federal Reserve and the Treasury have remained silent, and negotiations have made no progress.
Just at the time of South Korea’s $350 billion investment, one thing complicated the situation.
In September, the U.S. Immigration Bureau suddenly searched several Korean companies in the United States, and also seized a number of Korean technical workers on the grounds that there were “visa problems.”
Although most of them were released and then sent back to South Korea, the matter was widespread in the Korean media. South Korean Prime Minister Kim Min-seok responded directly that if the United States does not issue visas to Korean workers, it will be difficult for Korean enterprises to continue to invest in the United States.
Korean enterprises in the U.S. projects, mostly semiconductors, batteries, chips packaging these high-end manufacturing industries, need a lot of skilled workers. these people are generally from South Korea, if the visa is limited, the project must be stopped.
This is not only a legal issue, but also an economic issue. Companies have said that there is no substitute workers in the United States, and equipment debugging and factory commissioning will be delayed.
The Korean stock market has already reacted. Over the past two weeks, a number of large Korean-owned enterprises have seen net funds leak, and capital markets have begun to worry about future policies.
Meanwhile, the U.S. has given some advantages in tariffs. According to the preliminary agreement reached by South Korea and the United States in September, if South Korea implements its $350 billion investment on time, the United States will reduce tariffs on steel, auto parts, lithium battery materials and other industries from 25% to 15%.
This is a big temptation for the Korean manufacturing industry, but the premise is: pay first.
Korea is now: If you don't invest, you can't enter the US market; If you invest, the country may bear the risk of economic shock, political turmoil and currency devaluation.
Japan looks good and clever in this game.Behind the platform of JBIC is their experience of operating capital overseas for decades.They know how to hide national interests in “cooperation” in a institutionalized way.
They make the project "market-oriented", and the risks are shared by participating enterprises; If the project is delayed or failed, part of the capital can be recovered; In accounting and finance, investment can be recorded as a "strategic reserve" rather than a "fiscal expenditure".
To put it bluntly, Japan can play. South Korea is too real and direct.
Now, South Korea pins its hopes on the APEC summit in October. At the summit in Chongqing, Korea, Lee hoped to take this opportunity to speak face-to-face with Trump to try to rearrange the structure and pace of the $350 billion investment.
But so far, the White House has not officially announced whether Trump will go in person. Even if we go, whether the negotiation can be concluded is still unknown.
Trump's attitude is very clear, This money is not only economic cooperation, but also loyalty. He wants money from Japan and South Korea to prove that "America is strong again" is feasible.
The national interests of Japan and Korea are now on the table of negotiations, and the $900 billion investment is seen as "cooperation" on the surface, in fact, a financial war without smoke.
Japan uses platforms to cushion risks, while South Korea is about to fall into crisis. This was a smart blackmail and a common tactic for Trump. He used the market to lure, pressure to coerce, and rules to secure it.
Li Ziming's "difficulties" are known to the whole world, but Trump's response has only one sentence: “35 billion, not a minute less!”
References:
Trump Talks: Japan $55 Billion, South Korea $35 Billion, All Must Be Prepaid 2025-09-26 15:49 PM Source: Observer Network
The U.S. "attack" on Korean companies continues: Korean companies postponed projects in the U.S., a large number of engineers were forced to leave 2025-09-18 15:49 PM Source: First Finance
“The APEC Summit in South Korea will enter a hundred-day countdown on whether or not Trump will be present with attention”2025-07-21 14:36 PM Source: International Online