US ally states investment demand might lead to financial crisis
(MENAFN) South Korean President Lee Jae Myung has warned that the $350 billion investment requirement proposed by the United States as part of a bilateral trade agreement could lead to a serious liquidity crisis, according to reports. The president cautioned that such a move might destabilize Asia’s fourth-largest economy and potentially mirror previous regional financial collapses.
The trade deal, unveiled by US President Donald Trump in late July, calls for a reduction in tariffs on Korean imports from 25% to 15%. In exchange, South Korea committed to significant investments in the United States, including the purchase of $100 billion worth of American oil and gas, among other measures, as stated by reports.
“Without a currency swap, if we were to withdraw $350 billion in the manner that the US is demanding and invest this all in cash in the US, South Korea would face a situation similar to the financial crisis it experienced in the past,” Lee said in an interview, stressing that the agreement urgently needs revision to prevent systemic risks.
Lee also criticized the perceived “harsh” treatment of South Korean workers after 300 nationals were detained at a battery plant under construction in Georgia during a US immigration raid, noting the public anger this has caused.
Earlier this week, South Korean Foreign Minister Cho Hyun raised concerns over the practicality of the investment package, emphasizing that Seoul must first resolve visa and labor issues before any substantial investments can proceed, according to reports.
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