US President Donald Trump met with South Korea’s President Lee Jae-myung on Wednesday in the final leg of his Asian tour, as he seeks to iron out a trade deal with Seoul that appears more elusive.
Speaking broadly about international trade in Seoul, Trump suggested a more conciliatory approach than his usual confrontational stance. “The best deals are deals that work for everybody,” he said.
Trump praised their “very special relationship” during remarks at a business forum. He said the US and South Korea are “wedded” and that they’re “very close” to a deal.
But the disparity between what Trump is asking for and what South Korea can deliver threatens to overshadow the meeting between Trump and Lee Jae-myung in Gyeongju, a historical city playing host to the annual Asia-Pacific Economic Cooperation summit.
According to senior officials in Seoul and Washington, the sticking point of Trump’s demand that South Korea invest $350 billion in the US remains the main obstacle to an agreement.
Korean officials say putting up cash could destabilise their own economy, and they’d rather offer loans and loan guarantees instead. Seoul would also need a swap line to manage the flow of its currency into the US.
Speaking at the forum before Trump arrived, Lee warned against trade barriers.
“At a time when protectionism and nationalism are on the rise and nations focus on their immediate survival, 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.”
Can Trump and South Korea strike a trade deal?
Lee took office in June and had a warm meeting with Trump at the White House in August, when he cranked up the flattery.
On Wednesday, he also showered Trump with gifts in Gyeongju, presenting him with a gold medal and crown. The medal represents the Grand Order of Mugunghwa, the country’s highest honour, and Trump is the first US president to receive it.
Trump said, “It’s as beautiful as it can possibly be”, and “I’d like to wear it right now.”
Next was a replica of a royal crown from the Silla Kingdom, which existed from 57 B.C. to 935 A.D. The original crown was found in a tomb in Gyeongju, the kingdom’s capital.
But the main issue many in South Korea will be waiting to see is if Lee Jae-myung can get a trade deal with Trump.
Since their August White House rapprochement, tensions have mounted between Seoul and Washington, notably over a US immigration raid on a Hyundai plant in Georgia in September.
More than 300 South Koreans were detained, sparking outrage and a sense of betrayal. Lee said companies would likely hesitate to make future investments unless the visa system was improved.
“If that’s not possible, then establishing a local factory in the United States will either come with severe disadvantages or become very difficult for our companies,” he said. “They will wonder whether they should even do it.”
Trump-Xi meeting looms over APEC conference
Established in 1989 as a 12-member forum to promote free trade and economic cooperation, APEC now has 21 members, including the United States, South Korea, China, Japan, Australia, and Russia.
The members wield significant collective weight, accounting for 37% of the world’s population and more than half of global trade in goods as of 2024, according to South Korean government data.
South Korea, as host of the APEC annual leaders meeting, is providing a ground for the easing of trade tensions if discussions and negotiations go well.
While Seoul tries to eke out a deal with the US, Trump is also expected to hold a closely watched meeting on Thursday with Chinese leader Xi Jinping.
Trump and Xi in recent months have been locked in an escalating trade war, with Washington imposing high tariffs and tightened technology controls and China retaliating with curbs on rare earth shipments, one of its key sources of leverage.
It’s unclear whether either leader will be willing to make major concessions, but both sides have indicated that they’re willing to dial down tensions.
And instead of being caught up in the Washington-Beijing rivalry, South Korea should use its role as chair to convey a message from “middle power” nations promoting free trade and global cooperation, said Choi Yoon Jung, an analyst at Seoul’s Sejong Institute.
North Korea says it test-fired a cruise missile
Meanwhile, Seoul’s neighbour, North Korea, said Wednesday it fired sea-to-surface cruise missiles into its western waters, in another display of its growing military capabilities.
According to North Korea’s official Korean Central News Agency, Tuesday’s test was a success, and the weapon would contribute to expanding the operational sphere of the country’s nuclear-armed military.
The North Korean report came hours before the summit between Trump and the South Korean president.
Trump had previously floated the possibility of extending his stay in South Korea to meet with Kim Jong-un, but on Wednesday said, “The schedule was very tight.”
Pyongyang has so far dismissed overtures from Washington and Seoul, saying it won’t resume diplomacy with the United States unless Washington drops its demand for the North’s denuclearisation.
In response to the North Korean missile test, Trump brushed off the development, saying, “He’s been launching missiles for decades, right?”