"A brewing crisis now threatens the 72-year-old alliance and South Korea's hosting of the APEC Summit at the end of this month. The first sign of trouble was the lack of a joint statement at the Lee-Trump summit on August 25. That worried me, given my own experience managing U.S. alliances in Asia: These statements, often produced after the first meetings between presidents, are critical in charting out the path for both governments to follow in the coming years."
"Second, disagreement over the terms of a $350 billion investment commitment made by Seoul as part of its tariff deal continues to plague Korea-U.S. relations. The Korean government agreed to capitalize a fund, plus $100 billion in U.S. energy purchases, that Trump could invest in U.S. business and manufacturing as he chooses. But now Lee argues that the $350 billion investment agreement is too large for Korean coffers."
Lee Jae Myung and Donald Trump agreed to reduce U.S. tariffs on South Korea from 25% to 15% and aligned on security policy toward North Korea. The summit produced no joint statement, signaling the start of tensions. A $350 billion investment commitment by Seoul, combined with $100 billion in U.S. energy purchases, is now contested: Seoul says the sum equals about 84% of its foreign exchange reserves and risks bankruptcy without U.S. loan guarantees or a currency swap. Trump insists on full cash equity, control over investments, and disagrees on how investment returns should be shared; U.S. officials have sought even larger commitments.
Read at Fortune
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