Donald Trump said the U.S. has “pretty much finalised” the details of a fraught trade deal with South Korea as he marked the last pitstop on his whirlwind Asia tour Wednesday.
The US President confirmed the highly anticipated deal and almost off-the-table agreement as he sat down for a dinner with South Korean President Lee Jae Myung in the southeastern city of Gyeongju.
Trump is on his five-day diplomacy tour of Asia and has also visited Malaysia and Japan, before arriving in South Korea. He will departs for Washington Thursday.
On being asked by a reporter whether he and the South Korean President had reached a deal, Trump said: “We made our deal, pretty much finalised it.”
South Korea is hosting Trump at the Asia-Pacific Economic Cooperation Forum in the coastal city ahead of his talks with Chinese president Xi Jinping Thursday. He was treated to a lavish reception after he wrapped up the Tokyo leg of his whirlwind tour.
Trump’s comments came at a time hopes were dim for a trade deal with its East Asian ally as the U.S. leader was still thawing tensions created by his trade war with China.
Washington pressed South Korea to make a similar trade arrangement as signed with Japan of strategic investments, loans and guarantees worth $550bn (£416bn) in exchange for a tariff relief.
But Seoul says it cannot afford a payment of $350bn (£264bn) pledged upfront. Instead, it has offered a mix of phased investments, loans and other measures. This has remained a strain point of trade talks between the two sides.
It has finally been agreed that Seoul can split its promised $350bn investment fund into $200bn in cash to be paid in instalments of $20bn, Lee’s aides said.
The other $150bn is to be spent on investments in shipbuilding, which South Korea has promised to help Trump restore.
Earlier during the day, Trump announced that a trade deal with South Korea would be finalised “very soon” as he addressed a summit of APEC CEOs in Gyeongju before sitting down with the South Korean president for dinner.
However, officials on both sides expressed skepticism of the prospect of a breakthrough.
U.S. and South Korea had announced a trade deal in late July, allowing Seoul to avoid the worst of the tariffs by pushing them to pump new investments worth at least $350bn (£264bn) into America.
Both sides hit a stalemate after the structure of those investments remained unclear.
Trump’s visit to the Asian ally nations, who are among the hardest hit by his tariff policies and increased U.S.-China trade war, is aimed at building better ties.
Attempts were also made by South Korean President Lee to woo him.
Lee’s office said that in recognition of Trump’s role as a “peacemaker” on the Korean peninsula, he was awarded the replica crown of “Grand Order of Mugunghwa”, which is named after South Korea’s national flower, a pink hibiscus also known as the Rose of Sharon in English.
“I’d like to wear it right now,” Trump said when presented with the glittering award. South Korean officials said he is the first U.S. president to receive the honour.
The meal included “mini beef patties with ketchup”, a “Korean Platter of Sincerity” featuring U.S. beef and local rice and soybean paste, and grilled fish with a glaze of ketchup and gochujang, a red chilli paste.
A brownie adorned with gold called “Peacemaker’s Dessert” was served at the start of a working lunch.
Lee also requested the U.S. to allow it to reprocess nuclear fuel to power submarines as South Korea is banned from doing so without US consent, owing to a bilateral agreement.
In response, the U.S. president said he will help “straighten out” South Korea’s problems with North Korea. Both Korean nations have been facing a war-like crisis amid Pyongyang’s repeated test-launches of missiles.
He has invited Lee back to the White House, the South Korean presidential advisor said after the dinner.
Trump was also expected to meet with North Korea’s Kim Jong Un, with several public wishes to do so, during this trip but the brief window of Wednesday did not work out.
In order to ease trade woes of the region, Trump said he expected to reduce U.S. tariffs on Chinese goods in exchange for Beijing’s commitment to curtail exports of fentanyl precursor chemicals.
The U.S. could cut down the 20 per cent levies on Chinese goods by half it currently charges in retaliation for the export of such chemicals, the Wall Street Journal reported.
In his final high-level meeting, Trump is scheduled to hold talks with Xi on Thursday in the port city of Busan, which he expects to be at least three to four hours long. Trump said he expects the talks with his Chinese counterpart to go well.
