[2025 Audit] Koo Yoonchul: "Difficult to Handle $350 Billion... Meeting with Besant Being Arranged for the 15th" (Comprehensive)

Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul stated on the 13th that regarding tariff negotiations with the United States, "Ultimately, we will ensure that the agreement prioritizes national interests and is based on practicality." Concerning the $350 billion cash investment demanded by the United States, he drew a clear line, saying, "Given the foreign exchange market, it is almost impossible."

During the Ministry of Economy and Finance's audit at the National Assembly that day, the Korea-U.S. tariff negotiations emerged as a key agenda item. Contrary to the Korean government's explanation at the end of July that most of the $350 billion investment in the United States would be in the form of loans and guarantees, the Trump administration has insisted on a full cash investment, leading to a deadlock in the negotiations. In response to the U.S. demand for full upfront payment, Korea has set the establishment of an unlimited currency swap as a prerequisite.

Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul is responding to a lawmaker's question at the National Assembly's Planning and Finance Committee audit held on the 13th. 2025.10.13 Photo by Kim Hyunmin

Annual Foreign Exchange Procurement Cap at $20 Billion...Request for Confirmation on U.S.-Japan Side Deal

Deputy Prime Minister Koo responded to an opposition lawmaker's question about whether it would be possible to pay the entire $350 billion U.S. investment in cash by saying, "It would be difficult to manage," and added, "I have already sufficiently persuaded Secretary Besant about our foreign exchange situation."

He explained, "The maximum amount we can raise without foreign exchange risk is $15 to $20 billion per year. To invest more than that, additional foreign currency must be procured." Deputy Prime Minister Koo reaffirmed the government's existing stance, stating, "Even if foreign currency is procured, it will not be used unconditionally. Investments will only be made in projects that are commercially viable and must be recoverable." He emphasized, "We have consistently maintained that a mix of loans, guarantees, and equity investments is necessary, and there can never be any side deals."

Regarding the possibility of a side deal between the United States and Japan, Koo said that a request for confirmation had been made to the Japanese side, but no response had been received so far. Referring to Japanese Minister for Economic Revitalization Ryusei Akazawa's remarks that only 1-2% of the $550 billion Japan pledged to invest in the United States would be in cash and the rest would be in the form of loans or loan guarantees, Deputy Prime Minister Koo stated, "Relevant ministries are checking with their Japanese counterparts, but officially, Japan has not provided us with an answer."

The United States, citing the memorandum of understanding (MOU) signed with Japan, has increased pressure on Korea by demanding a $350 billion upfront investment, the effective removal of Korea's rights to decide investment destinations and profit distribution, and the remittance of investment funds within 45 days. This has led to suspicions that the United States and Japan may have reached a side deal in the tariff negotiations, making Korea a scapegoat for tariffs.

Koo emphasized, "On July 30, I made it clear to the United States that we would use a mix of equity, guarantees, and loans." He added, "Japan, while negotiating with the United States, has publicly stated that it would pay the entire $550 billion in cash, but the United States has since changed its position toward Korea."

When Democratic Party lawmaker Park Honggeun asked whether it would be feasible to propose a phased or conditional swap agreement if an unlimited or permanent swap is difficult, Deputy Prime Minister Koo replied, "We are discussing various options with the United States regarding such matters."

Trip to Washington on the 15th...Meeting with U.S. Treasury Secretary Planned After Arrival

Regarding the Korea-U.S. tariff negotiations, Deputy Prime Minister Koo stated that he had requested a meeting with U.S. Treasury Secretary Scott Besant, saying, "I will make sure to meet him." He is scheduled to depart for Washington, D.C. on the 15th to attend the G20 Finance Ministers' Meeting and is seeking to hold talks with Secretary Besant as soon as he arrives. However, it appears that the specific format and agenda for the meeting have not yet been determined.

When People Power Party lawmaker Park Dae-chul cited an analysis by the National Assembly Budget Office, pointing out that "if the automobile tariff rate is 50%, exports will decrease by 30%, and if the steel tariff rate is 75%, exports will decrease by 60%," Deputy Prime Minister Koo responded, "We are not assuming tariff rates of 50% or 75%. We will focus on further reducing the rates to 25% or even lower to 50%."

In response to concerns that tariff uncertainty with the United States has increased, Deputy Prime Minister Koo said, "Some of the uncertainty has been resolved." When opposition lawmakers criticized the Korea-U.S. negotiations as inadequate, he countered, "The previous administration did not make any preparations during the period of martial law. Since there was no preparation at the ministerial level, it was not possible to elevate the negotiations to the presidential level." He added, "Please also consider that we have reduced the mutual tariff rate from 25% to 15%."

Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-chul is responding to a lawmaker's question at the National Assembly's Planning and Finance Committee audit held on the 13th. 2025.10.13 Photo by Kim Hyun-min

Real Estate Measures to Be Announced Soon...F4 Meeting to Be 'Institutionalized if Possible'

Regarding the real estate measures to be announced by the Lee Jaemyung administration this week, Deputy Prime Minister Koo said, "We will accelerate supply while announcing policies that can address demand." This suggests that while a mid- to long-term policy direction will be presented, there will be no immediate increase in property holding taxes. When asked by an opposition lawmaker whether the new measures would include real estate taxation, he replied, "We will at least announce the policy direction regarding taxes."

Deputy Prime Minister Koo took a cautious stance on Democratic Party lawmaker Jin Sungjoon's proposal to make the F4 meeting, which discusses macro-financial and economic policy issues, an official body. He responded, "Please understand that there are also unofficial exchanges of opinions and communication." Jin pointed out, "Immediately after martial law was declared, Deputy Prime Minister Choi Sangmok convened the F4 meeting, and there were even suspicions that the meeting was convened to secure martial law funds. However, there are no records to prove or disprove this, so it is necessary to make it an official body and keep records of the discussions." Deputy Prime Minister Koo replied, "We will review whether it is realistically feasible to implement this."