Trade negotiations between South Korea and the United States have stalled due to currency issues. The $350 billion investment package announced in July with U.S. President Donald Trump is said to be a heavy burden for Seoul’s economy.
Although Japan recently signed a $550 billion deal with the U.S., South Korea is not ready to accept such terms. The reason is that the size of the Korean currency market is small, and large demand for dollars could lead to the depreciation of the national currency, the won.
In recent years, pressure on the won has increased. Last year, it fell to its lowest level in 15 years. According to experts, the new deal would raise dollar demand by up to $100 billion annually in 2026–2028, putting serious pressure on the country’s economy.
South Korea is discussing signing a currency swap agreement (an agreement on the exchange of currencies or interest rates) with the United States to ease the problem. So far, such a privilege has been granted only to Japan and a few major countries. Experts note that such an agreement would help stabilize Korea’s economy.
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