US-Korea Trade Talks Intensify: $350 Billion Investment Fund and Tariff Reduction Negotiations Ahead of APEC Summit

Listeners, today's episode of the South Korea Tariff News and Tracker brings you a crucial update on US-South Korea trade relations as of September 24, 2025. Tensions and negotiations between Seoul and Washington remain front and center, with both nations working to resolve a months-long deadlock over tariffs and investment. The latest round of talks is aiming to produce a final deal before the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju at the end of October. Government officials report that Deputy Prime Minister and Finance Minister Koo Yun-cheol is meeting with US Treasury Secretary Scott Bessent in New York to discuss the structure of a proposed $350 billion Korea-US investment fund and a potential currency swap agreement to stabilize markets surrounding the deal. The core issue remains the size and form of Korea’s investment. Washington wants equity investments, like Japan’s, while Seoul is pushing for a package of guarantees rather than large outflows of cash, fearing volatility in its own foreign exchange markets. If Korea accepts this deal, the tariff rate on bilateral trade—including autos—would drop from 25 percent to 15 percent, marking a significant shift for exporters and importers on both sides. The Korea JoongAng Daily highlights ongoing negotiation hurdles, but also notes optimism from Korean officials that communication remains open and progress is possible before the summit. Industry Minister Kim Jung-kwan states, “We’re in a push-and-pull phase,” with neither side considering talks truly deadlocked. The Korea Times notes US President Donald Trump is expected at APEC, and his administration’s policy sees tariffs as key leverage for reshoring manufacturing. Compared to his predecessor, Trump’s team is moving away from government subsidies and shifting more onshoring costs to private companies, resulting in US tariff revenues soaring to $152 billion annually. These tariffs act as a quasi-consumption tax, impacting both Korean exporters and US consumers. Amid these developments, experts at the Korea Economic Research Institute recommend Korea diversify exports and markets to manage unpredictability in US tariff policy. With US barriers rising during Trump’s second term, Korea’s exports to places like the EU, Middle East, and ASEAN have increased, helping offset lost US market share. S&P Global Ratings’ tracker reports that as of September 9, 2025, the average US trade-weighted tariff rate is 16.9 percent, down slightly from 17.1 percent at the end of August, largely on the expectation of a Korea-US agreement. Finally, experts stress the urgency for Korea to quickly finalize and implement new free trade agreements—including joining the CPTPP—to shore up its international competitive position against unpredictable US policy. Listeners, stay tuned for more breaking updates as APEC approaches and negotiations continue. Thanks for tuning in. Don't forget to subscribe for all the latest episodes. This has been a Q This content was created in partnership and with the help of Artificial Intelligence AI.