South Korea, US make ‘meaningful progress’ in tariff talks, senior Seoul official says

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By Yena Park and Heejin Kim

SEOUL (Reuters) -South Korea and the United States made “meaningful progress” in negotiations over $350 billion of investments in the U.S. that Seoul pledged in a deal reached in July to secure reduced U.S. trade tariffs, Korea’s top policy adviser said on Wednesday.

In an interview with a YouTube channel, Kim Yong-beom said U.S. negotiators made a new proposal about how South Korea could implement the investment package. He declined to give details since the talks were ongoing.

At the start of negotiations, U.S. officials were cool to Seoul’s proposal that the investment be made in the form of guarantees or loans, he added. They repeatedly said the investment should have a “cash flow,” Kim said.

He said South Korean officials told U.S. counterparts that Seoul could not invest $350 billion in one single payment.

“There should be a reasonable business plan that Korean companies can actually participate,” he said, adding that Seoul officials told U.S. counterparts such an investment could have an impact on Korea’s foreign-exchange reserves.

U.S. officials now understand the situation, he added.

President Lee Jae Myung told Reuters last month that South Korea’s economy could plunge into crisis rivalling its 1997 meltdown if the government accepted current U.S. demands in the trade talks without safeguards.

Kim added that South Korean officials aim to clinch the trade deal with the U.S. by the end of October, when Seoul will host an Asia-Pacific Economic Cooperation summit.

U.S. Treasury Secretary Scott Bessent told CNBC on Wednesday Washington was close to finalising a trade deal with Seoul.

Bessent said U.S. and South Korean officials were meeting this week on the sidelines of the annual gathering of the International Monetary Fund and World Bank in Washington.

(Reporting by Heejin Kim; editing by Mark Heinrich)