Trade representatives from the US and South Korea are set to meet in Washington this week to discuss potential investments in American energy projects and other ventures under a recently approved $350 billion fund, according to people familiar with the matter.
The talks between South Korean officials and representatives from the US Commerce Department and President Donald Trump’s National Energy Dominance Council are expected to review specific potential investments under that fund established as part of last year’s US-South Korea trade framework, said the people, who requested anonymity to discuss private conversations.
The discussions are slated to come just days after the South Korean National Assembly approved legislation to create a new state-run vehicle to oversee those projects, paving the way for the two countries to enter into deals involving semiconductors, energy infrastructure and shipbuilding.
Discussions about plans for the investment fund were kick-started over the weekend while US and Korean officials were in Tokyo for an Indo-Pacific economic summit. One Korean official repeatedly emphasized the country’s plans to move at Trump speed to finalize US-Korea energy projects under the initiative, one of the people said.
South Korea’s Industry Ministry said it is in close communication with US counterparts but declined to comment on any planned talks. The US Commerce Department did not immediately respond to a request sent outside of business hours.
The urgency to begin talks about potential deals intensified after Trump threatened in late January to raise tariffs on some South Korean goods to 25 percent from 15 percent, citing frustration with the country’s legislature for moving slowly to codify the trade pact.
Since then, the US Supreme Court has struck down Trump’s emergency powers to unilaterally impose tariffs, upending much of the White House’s tariff strategy and compounding uncertainty about the global trade outlook. The US president has subsequently imposed short-term 10 percent tariffs on many imports.
US Trade Representative Jamieson Greer also announced last week that his office would begin probes into more than a dozen major economies including South Korea scrutinizing the industrial overcapacity and labor practices of trading partners. Those investigations are expected to serve as precursors to additional rounds of import duties.
The meeting with US and Korean officials comes amid a flurry of investment discussions between the Trump administration and major Asian economies.
Trump is also set to meet Japanese Prime Minister Sanae Takaichi in Washington this week where the two leaders are expected to discuss a $550 billion investment fund similar to South Korea’s arrangement with the US. Japan has already announced the first tranche of investments: a combined $36 billion in a US oil export terminal, gas power plant and synthetic diamond manufacturing facility. More planned investments under the Japanese fund are expected to be rolled out during Takaichi’s visit.
Trump is also slated to travel to Beijing later this month to meet with with Chinese President Xi Jinping where the two are expected to discuss trade and business deals, including a Chinese purchase of Boeing Co. jets.
The Korean initiative will begin with 2 trillion won ($1.34 billion) in capital fully funded by the government and operate with a three-member board of directors, according to the South Korean finance ministry.
A dedicated investment fund will also be set up within the Korea-US Strategic Investment Corp. to finance projects through equity investments as well as loans and guarantees, including support for shipbuilding cooperation initiatives with the US. The law also requires the corporation to establish a risk-management committee to oversee financial exposure tied to investments. (Bloomberg)
