South Korea could fall into financial crisis if it meets US demands

VTV.vn - South Korean President Lee Jae Myung warned of the risk of a financial crisis if Seoul carries out its commitment to invest $350 billion in the US without a protection mechanism.

South Korean President Lee Jae Myung. Photo: Yonhap/TTXVN

The South Korean economy could fall into a financial crisis similar to the one in 1997 if it accepts US investment demands in trade negotiations without the necessary protection mechanisms, South Korean President Lee Jae Myung has warned.

South Korea has previously pledged to invest $350 billion in the United States in exchange for a reduction in tariffs from 25 percent to 15 percent. However, according to the South Korean leader, this investment commitment would not be feasible without financial mechanisms such as a currency swap agreement.

He warned that a huge cash withdrawal could plunge the South Korean economy into a situation similar to the 1997 financial crisis.

Currently, South Korea is still trying to negotiate, in the context that US tariffs on Korean goods in the second quarter increased 47 times compared to the fourth quarter of 2024, severely affecting key industries such as automobiles and steel.

Compared to the fourth quarter of 2024, the tax on Korean imports increased by $3.23 billion, equivalent to an increase of 47.1 times - the highest among the 10 major partners, followed by Canada (19.5 times), Mexico (17.8 times) and Japan (8.2 times). The total tax amount that US importers had to pay on Korean goods in the second quarter was $3.3 billion, ranking 6th among Washington's 10 largest trading partners. China ranked first with $25.93 billion, followed by Mexico (5.52 billion USD), Japan (4.78 billion USD), Germany (3.57 billion USD) and Vietnam (3.34 billion USD).

South Korean businesses have urged the government to find ways to reduce the impact of new US tariffs on strategic industries and negotiate with the US to reform the visa program for Korean workers. The call was made at a seminar organized by the Korea Chamber of Commerce and Industry (KCCI), attended by Trade Minister Yeo Han Koo and executives of several leading businesses such as Hyundai Motor, LG, POSCO, Lotte...

Source: https://vtv.vn/han-quoc-co-the-roi-vao-khung-hoang-tai-chinh-neu-dap-ung-yeu-cau-cua-my-100250923093154616.htm