Seoul: U.S. President Donald Trump announced that South Korea and Japan will provide hundreds of billions of dollars in upfront investments to the United States, a claim that has sparked pushback from both allies who stress that any commitments will be phased and tied to specific projects.
Speaking on Thursday, Trump said Japan would contribute $550 billion and South Korea $350 billion, describing the amounts as upfront payments that would boost American industries and jobs. The figures, however, appear at odds with official positions in Tokyo and Seoul.
Japan has signed a memorandum of understanding with Washington, but Japanese officials clarified that the investment framework is meant to unfold gradually until January 2029, not as a lump sum. Funds are expected to be directed through state-linked institutions into areas such as shipbuilding, pharmaceuticals, and critical minerals.
South Korea remains more cautious, with President Lee Jae Myung warning that disbursing such a large amount without safeguards could destabilize the country’s economy. Lee has compared the risks to the 1997 Asian financial crisis and has insisted that investments should be commercially viable and structured over time. Seoul is also pushing for measures such as a currency swap line to protect against volatility.
Talks between U.S. and South Korean negotiators have stalled as both sides remain divided over the scale and sequencing of contributions. The U.S. administration has linked the investment pledges to its broader tariff negotiations, with Trump having previously threatened sweeping duties on imports from both allies unless new agreements were reached.
The disputes underscore growing tensions in Washington’s economic relationships with key partners, as Trump continues to frame defense and trade arrangements in transactional terms. While Japan has moved ahead with a phased framework, Seoul’s resistance highlights the difficulties of implementing Trump’s ambitious claims in practice.
Markets are watching the negotiations closely, as any agreement could have major implications for regional economies and global trade.