▲ President Lee Jae-myung and US President Donald Trump
The British daily Financial Times (FT) reported on the 9th (local time) that discontent is growing in the United States over the lack of concrete fund execution more than a year after the South Korean government agreed with the US on a $350 billion (approx. 470 trillion won) investment package in the US.
A US source told the FT that "the South Korean government needs to speed things up," warning that failure to do so could provoke a backlash from US President Donald Trump.
Another source conveyed that underlying discontent over the delayed investments also played a role in President Trump's recent public criticism regarding South Korea's insufficient support concerning the war in Iran.
Jennifer Lee, a partner at the US consulting firm The Asia Group, said, "Unlike Japan, which has continuously rolled out large-scale investment announcements, South Korea's progress has been slow, leading to a buildup of frustration within the US government."
South Korea's investment pledge was part of last year's bilateral trade agreement between South Korea and the US.
At the time, instead of the US lowering the tariffs it intended to impose on South Korean products from 25% to 15%, South Korea agreed to invest a total of $350 billion in the United States.
Currently, the construction of a gas-fired power plant and a nuclear power plant in Texas are being strongly reviewed as prospective investment candidates.
Regarding the US-bound investments, the FT pointed out that the South Korean government is putting business feasibility as its top priority.
Min Jeong-hun, a professor at the Korea National Diplomatic Academy, explained, "Since companies are hardly going to invest in projects lacking economic viability, the government has no choice but to be cautious. On the other hand, President Trump wants prompt results, so the positions of the two sides are misaligned."
The newspaper also noted that the cautious attitude of South Korean companies was influenced by a raid last September by US Immigration and Customs Enforcement (ICE) on a joint battery plant operated by Hyundai Motor Group and LG Energy Solution in Georgia, US.
The rationale is that the US immigration authority's crackdown has made South Korean companies hesitant about investing in the US.
However, the FT reported that the technological prowess of South Korea's shipbuilding industry, which boasts the world's second-largest construction volume, is cited as one of the few negotiating cards South Korea holds, aligning with the Trump administration's revitalization policies for the US shipbuilding industry.
Experts express concern that delays in investment announcements could give the US government the perception that South Korea is "trying to evade fulfillment of the agreement."
In particular, with President Trump facing upcoming mid-term elections in November and needing to tout the attraction of US-bound investments as an achievement, the pressure is expected to intensify further.
The FT noted that "South Korea's US investment issue is also complexly intertwined with other security issues in the South Korea-US relationship," mentioning President Trump's instruction to downscale the South Korea-US joint military exercise, Ulchi Freedom Shield (UFS).
Professor Ramon Pacheco Pardo of King's College London in the UK projected that to increase his negotiating leverage, President Trump might reverse last year's agreement where the US decided to support South Korea's plan to acquire nuclear-powered submarines, or pull out the card of withdrawing US forces from Korea once again.
He forecasted, "While the foundation of the South Korea-US alliance is solid, President Trump's perspective on alliances could make bilateral relations unstable during his term."
(File Photo: Yonhap News)
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