South Korea is sending top-level negotiators to Washington to settle trade disputes and come to a favorable agreement. The back-and-forth on tariffs and trade between the U.S. and China may come to an end, depending on this week’s negotiations. 

Progress on the latest round of discussions depends on whether or not they can resolve issues such as currency-market risks tied to a proposed $350 billion investment package and securing a U.S. commitment to a currency swap line.

South Korea renews momentum in US tariff talks

The South Korean government said on Wednesday that its industry minister and chief presidential secretary for policy will travel to the United States on Thursday for follow-up talks aimed at reducing U.S. tariffs on South Korean goods.

The visit is Seoul’s latest effort to turn the earlier agreed-upon terms with Washington into a finalized deal. The South Korean officials are optimistic about the meeting. The finance minister recently said the two sides had made “huge progress” toward a tentative deal.

Recently, the U.S. has shown a willingness to adjust the structure of its proposed $350B investment package tied to tariff relief, which has raised hopes that the long-standing dispute can finally be resolved.

Disagreements over investment terms, Washington’s oversight role, and South Korea’s currency stability have slowed progress in past discussions. Seoul has also asked for a currency swap arrangement with the U.S. to help manage exchange-rate risks linked to future investments.

This week’s trip is meant to resolve those issues, and it shows that Seoul wants to close the deal soon before political or market shifts complicate matters further.

Deal stalls on currency risk, investment structure, and US response

The current challenges holding back an agreement that works for both sides include issues surrounding currency stability, investments and a slowdown in the responses from the U.S.

As part of its demands in earlier discussions, the U.S. proposed that South Korea commit about $350B in direct capital spending, meaning that South Korean companies would have to put large amounts of money directly into U.S. facilities or assets, in exchange for reducing tariffs.

Seoul fears that this investment plan could hurt the won’s stability and is instead proposing that the investment be made through loans, guarantees, and joint ventures. Washington is yet to agree.

Seoul has submitted its proposals, including tariff cuts and financial safeguards, and is waiting for Washington’s reply. Previous delays from the U.S. side have slowed talks, and Seoul worries that more hesitation could further derail momentum.

Both governments appear more hopeful than in previous rounds. South Korea sending senior officials to negotiate rather than lower-level teams shows that the country sees this as a turning point.

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