SEOUL, August 17 (AJP) - South Korea's industry minister arrived in Washington on Sunday and said that detailed disputes had surfaced in the final stretch of talks over a $200 billion investment package, casting doubt on a late-August announcement of the first project
Minister of Trade, Industry and Resources Kim Jung-kwan told reporters at Dulles International Airport on August 16 (local time) that video conferences and working contacts had not resolved the issues and that the whole file needed sorting in one pass. The end of the month remains the goal, he said, though more has come up than expected.
He made the trip three weeks after his last visit and without a chief trade negotiator. President Lee Jae Myung removed Yeo Han-koo from the post effective midnight on Aug. 15 through compulsory dismissal, a step rarely used against a political appointee, and gave no reason. No successor has been named.
The $200 billion is the strategic investment portion of a $350 billion commitment made under last year's tariff agreement, which cut U.S. tariffs on Korean goods from 25 percent to 15 percent, with $150 billion allocated to shipbuilding. A joint fact sheet and a strategic investment memorandum released on Nov. 14 set the total to be pursued by January 2029 and capped outflows at $20 billion a year.
Kim said he had received no warning that tariffs would rise if Seoul did not move faster. He said Trump had been calling for speed since early this year and that Seoul shared the aim, with a year already passing.
Trump wrote on Truth Social on Jan. 26 that because the National Assembly had not enacted the trade deal, he was raising tariffs on Korean automobiles, lumber and pharmaceuticals and all other reciprocal tariffs from 15 percent to 25 percent. The increase was not carried out, and the National Assembly passed the special law on Korea-U.S. strategic investment on March 12.
The tariff ceiling is the second front. The U.S. Trade Representative opened two Section 301 investigations in March, one into forced labor and one into structural overcapacity, and Korea was a target of both. The forced-labor measure took effect July 24 and raises most-favored-nation rates up to 12.5 percent rather than adding 12.5 points on top of them. The overcapacity finding has not been issued. Seoul's position is that the combined total must not exceed 15 percent.
Kim said Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer had both said they would honor the spirit of the agreement, and that he would not prejudge the outcome. Washington had indicated late August for the overcapacity result, he said, but it now felt like it was running longer.
He would not confirm that combined-cycle power generation remained the leading candidate for the first project, saying only to wait and see. Three weeks ago he said the first project was being discussed with energy at the center.
Commercial reasonableness is the governing principle, and the law permits only investments whose principal and interest can be repaid over the investment period. Among the candidates Washington has proposed, few have been found commercially viable. Japan closed its tariff talks in July 2025 and announced its first two projects in February and March. Korea finished about three months later and has yet to name one.
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