GYEONGJU, South Korea — President Donald Trump’s whirlwind Asia tour, fresh off a triumphant stop in Japan where he secured nearly $500 billion in investment pledges, ran into turbulence Wednesday as trade talks with South Korea dragged on without a breakthrough. At the heart of the impasse: Trump’s bold push for South Korea to pump $350 billion into the U.S. economy, a figure that Seoul views as a potential economic earthquake.
The high-stakes meeting between Trump and South Korean President Lee Jae Myung unfolded against the backdrop of the Asia-Pacific Economic Cooperation (APEC) summit in the ancient city of Gyeongju, a UNESCO World Heritage site once the capital of the Silla Kingdom. What was meant to be a celebration of alliance-building risked being overshadowed by unresolved tensions, including tariffs crippling Korean automakers and lingering bitterness from a U.S. immigration crackdown.
A Stark Contrast to Japan’s Warm Welcome
Trump’s visit to Japan earlier in the week had been a masterclass in diplomatic showmanship. He bonded with new Prime Minister Sanae Takaichi, joining her aboard a U.S. aircraft carrier to address troops and later unveiling multimillion-dollar energy and tech projects funded by Japanese firms. Commerce Secretary Howard Lutnick capped the trip with announcements of up to $490 billion in commitments from Tokyo business leaders—part of a broader $550 billion pledge tied to an existing trade pact.
In South Korea, however, the vibe was cooler. U.S. Treasury Secretary Scott Bessent, speaking to reporters on Air Force One Monday, admitted a deal was “not ready,” chalking it up to “a lot of details to work out.” Yet he hinted at progress, suggesting the two sides were “very close.” Korean Deputy National Security Director Oh Hyunjoo echoed the caution, telling reporters the talks were moving “a little bit more slowly than expected.” Key hurdles included the structure of investments, their formats, and profit-sharing arrangements.
At the core of the disagreement: Trump’s insistence on direct cash infusions from South Korea to fuel American growth. Korean officials argue that such a massive outlay—equivalent to about 15% of their GDP—could destabilize their export-driven economy. Instead, they propose loans, loan guarantees, and a currency swap line to ease the flow of won into dollars without sparking volatility. Without these safeguards, Seoul warns, the deal could falter entirely.
For now, South Korean exporters feel the pinch. A 25% U.S. tariff on automobiles leaves giants like Hyundai and Kia at a competitive disadvantage against Japanese and European rivals, who pay just 15%. Trump, ever the dealmaker, struck an unusually conciliatory tone at a Gyeongju business forum, declaring the U.S. and South Korea “wedded” in a “very special relationship.” He even softened his trademark tough talk on trade, musing that “the best deals are deals that work for everybody.”
Lee, speaking just before Trump’s arrival, struck a more urgent note. “At a time when protectionism and nationalism are on the rise… words like ‘cooperation,’ ‘coexistence,’ and ‘inclusive growth’ may sound hollow,” he said. “Yet, paradoxically, it is in times of crisis like this that APEC’s role as a platform for solidarity shines brighter.” In a bid to thaw the ice, Lee showered Trump with lavish gifts: a gold Grand Order of Mugunghwa medal—South Korea’s highest civilian honor, a first for a U.S. president—and a gleaming replica of a Silla Kingdom royal crown unearthed from a Gyeongju tomb. Trump, beaming, called the medal “as beautiful as it can possibly be” and joked about wearing it immediately.
Lingering Shadows: Immigration Raid and Visa Woes
The goodwill gestures couldn’t fully eclipse deeper frictions. Lee assumed office in June amid economic headwinds, and his August White House visit with Trump was all smiles and flattery. But cracks emerged in September when U.S. immigration agents raided a Hyundai plant in Georgia, detaining over 300 South Korean workers. The sweep ignited outrage in Seoul, with Lee decrying it as a betrayal that could deter future investments.
“Our companies will hesitate unless the visa system improves,” Lee warned. “Establishing a local factory in the U.S. will come with severe disadvantages… They will wonder whether they should even do it.” In response, South Korea’s Foreign Ministry announced in early October that Washington had agreed to short-term visas and a waiver program for Korean workers building U.S. industrial sites. Trump, asked about the raid Monday, distanced himself: “I was opposed to getting them out.” He pledged that visa reforms would soon make it easier for firms to import skilled labor.
Broader Horizons: China, North Korea Loom Large
Trump’s South Korea stop isn’t just about bilateral trade. On Thursday, he’s slated for a pivotal sit-down with Chinese President Xi Jinping, a encounter both sides frame as a chance to ease trade frictions. Trump, aboard Air Force One Wednesday, teased tariff reductions on Chinese goods tied to fentanyl precursors, saying Beijing would “be doing what they can do” and that “China is going to be working with me.” It’s a pragmatic pivot from the tariff wars of his first term, signaling a willingness to de-escalate amid global supply chain strains.
The wildcard remains North Korea. Trump has dangled the prospect of a reunion with leader Kim Jong Un, whom he fondly recalled from past summits: “I got along great with Kim Jong Un. I liked him. He liked me.” He even floated extending his trip—the final leg of his Asia itinerary—if Kim bit. But Pyongyang has rebuffed overtures from both Washington and Seoul, insisting on dropping U.S. demands for denuclearization before talks resume. Underscoring the tension, North Korea test-fired sea-to-surface cruise missiles into its western waters Wednesday, its first such display in months.
Trump shrugged it off: “He’s been launching missiles for decades, right?” Their first-term meetings yielded photo ops but no concrete curbs on Pyongyang’s nuclear ambitions, leaving the door ajar for another try—but not this time. “The schedule was very tight,” Trump conceded Wednesday, sounding resigned.
As Trump wraps his tour, the South Korea talks underscore a broader truth: In an era of rising protectionism, even “special relationships” demand tough compromises. Whether the $350 billion ask becomes a bridge or a barrier remains to be seen. For now, the APEC summit serves as a stark reminder that inclusive growth, as Lee put it, is easier said than done.