South Korea Faces Economic Risks Amid U.S. Demands for Upfront $350B Investment

President Donald Trump has asserted that South Korea will provide $350 billion in "upfront" investments for U.S. projects, similar to Japan's $550 billion commitment, viewing these payments as proof of his tariff-driven trade policy's success. However, South Korea disputes this characterization, emphasizing that such lump-sum payments without safeguards could destabilize its economy, and prefers to structure investments as loans tied to specific projects rather than direct upfront payments. South Korean officials and President Lee Jae Myung have warned that rushing into unsustainable deals without protections like currency swaps risks a financial crisis, reflecting a stalemate in ongoing trade negotiations with the U.S. Japanese officials, while publicly endorsing their deal, privately express concern about being seen as setting an unrealistic precedent. Economists and investors are uneasy about the uncertainty, fearing potential capital flight and market instability in South Korea if pressured to match Japan's terms. The outcome of these talks remains critical for U.S.-South Korea relations and regional trade and defense alignments, with no immediate resolution in sight.