South Korea is reviewing a new proposal from Washington linked to its US$350 billion (RM1.48 trillion) investment pledge in the US, whose implementation has become a key obstacle to finaliszing a trade deal reached in July.

“The US brought a new alternative, and we’re now reviewing it,” Foreign Minister Cho Hyun told lawmakers at a parliamentary audit on Monday, signalling progress after months of stalled talks over tariffs.

Cho said Seoul aims to make progress by the Asia-Pacific Economic Cooperation summit in late October, where President Lee Jae Myung is expected to hold talks with President Donald Trump.

Talks to formalize the trade deal reached in July have remained deadlocked, with disputes centring on South Korea’s US$350 billion investment commitment. Seoul has requested the US for a currency swap, warning that without it, the plan could hurt financial stability because the proposed investment amounts to over 80% of the country’s foreign reserves.

The original package included a mix of direct investment, loans, and loan guarantees, but Washington later demanded that the full amount be made through direct investment, Cho said. He didn’t elaborate on the details of the US’s revised proposal.

“We’ve explained to the US that if the entire investment were made directly, it would immediately cause foreign exchange pressures and could have a serious impact on our economy,” Cho said, reiterating South Korea’s reservations about the US demand.

The signs of flexibility come as the Trump administration has indicated openness to a possible deal with China to ease fresh trade tensions, while also criticizing Beijing’s new export controls as a major hurdle.

Source: Theedgemalaysia