>US Commerce Secretary Howard Lutnick bluntly asserted last week that South Korea must accept the deal or face higher tariffs – pointing out that Japan had already agreed to similar terms.
>**Under a framework agreement reached in July, the United States offered to reduce proposed tariffs on South Korean imports from 25 per cent to 15 per cent, but only if Seoul pledged to invest the US$350 billion into sectors chosen by Washington and made additional concessions.**
>….
>“South Korea is being coerced to drink from a poisoned chalice. If we accept the US demand as it is, this country would simply go belly up,” said Hur Jung, an economics professor at Sogang University in Seoul.
>“The country’s foreign exchange reserves would become depleted and the won’s value would plunge, sparking a foreign exchange crisis that would make the 1997 IMF bailout look mild by comparison.”
>**The deal Washington is pushing would require the South Korean government to channel its investments into US-designated special purpose companies. Profits would be split 90-10 in Seoul’s favour until the investment principal is recouped, after which the US share would surge to 90 per cent.**
>US$350 billion amounts to 84 per cent of South Korea’s foreign reserves, compared with Japan’s US$550 billion pledge – just 41.6 per cent of its far larger holdings.
I’ve read some analysis by economists that suggests that it would actually cost South Korea less to just accept 10% higher tariffs and instead invest in subsidies and other measures to help their exports instead of agreeing to this extortionate demand.
The trouble is that if they refuse, I suspect that Trump, Lutnick and company won’t stop at 25%, and will start looking for various other ways to threaten South Korea’s economy as well as its security against North Korea and China.
eilif_myrhe on
Invest billion in getting their citizens sent to arbitrary imprisonment by ICE?
___
*Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum*
teshh on
This has nothing to do with economics. It’s purely a protection racket ran by trump and his goons. Going back to his younger days when he was/is indebted to the Russian mafia, protection rackets are quite common in their playbook.
Trump goes “it’s a shame your business got tariffd/raided, invest x and I’ll “protect” you from future tariffs/raids.”
Meanwhile, whatever country that does pay finds their funds being siphoned off to enrich trump.
Plus_Sorbet on
They should absolutely refuse extortion like this. The tariffs will go as soon as the poorly educated figure out who actually paying them. Also, Epstein didn’t kill himself.
Toolatethehero3 on
In today’s lesson it is South Korea that learns the US is not an ally and not a friend. It’s amazing the child-like naivety of these leaders. South Korea doesn’t have any economic or military partnership whatsoever, it just hasn’t realized it yet. It’s now going to be turned into a vessel state and the US will now will now instruct Korea’s economic, military and social policies.
jpm0719 on
I do not recall seeing a ratified trade agreement between the US and any other country. Frameworks are just that, concepts of an agreement not an actual biding agreement. Fuck trump, that is all. South Korea can say sure and do whatever they want. trump wants quick, cheap things that he can claim as a win. Have any of his investment “deals” borne any fruit? Answer: No.
AdHopeful3801 on
Of course, what’s really going on here is solicitation of bribes, but the regime is such a mess I doubt South Korea can figure out who the bribes are supposed to go to.
I mean, other than the bribe of standing next to the Donald and promising billions in investments that you know will never happen.
7 Comments
>US Commerce Secretary Howard Lutnick bluntly asserted last week that South Korea must accept the deal or face higher tariffs – pointing out that Japan had already agreed to similar terms.
>**Under a framework agreement reached in July, the United States offered to reduce proposed tariffs on South Korean imports from 25 per cent to 15 per cent, but only if Seoul pledged to invest the US$350 billion into sectors chosen by Washington and made additional concessions.**
>….
>“South Korea is being coerced to drink from a poisoned chalice. If we accept the US demand as it is, this country would simply go belly up,” said Hur Jung, an economics professor at Sogang University in Seoul.
>“The country’s foreign exchange reserves would become depleted and the won’s value would plunge, sparking a foreign exchange crisis that would make the 1997 IMF bailout look mild by comparison.”
>**The deal Washington is pushing would require the South Korean government to channel its investments into US-designated special purpose companies. Profits would be split 90-10 in Seoul’s favour until the investment principal is recouped, after which the US share would surge to 90 per cent.**
>US$350 billion amounts to 84 per cent of South Korea’s foreign reserves, compared with Japan’s US$550 billion pledge – just 41.6 per cent of its far larger holdings.
I’ve read some analysis by economists that suggests that it would actually cost South Korea less to just accept 10% higher tariffs and instead invest in subsidies and other measures to help their exports instead of agreeing to this extortionate demand.
The trouble is that if they refuse, I suspect that Trump, Lutnick and company won’t stop at 25%, and will start looking for various other ways to threaten South Korea’s economy as well as its security against North Korea and China.
Invest billion in getting their citizens sent to arbitrary imprisonment by ICE?
___
*Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum*
This has nothing to do with economics. It’s purely a protection racket ran by trump and his goons. Going back to his younger days when he was/is indebted to the Russian mafia, protection rackets are quite common in their playbook.
Trump goes “it’s a shame your business got tariffd/raided, invest x and I’ll “protect” you from future tariffs/raids.”
Meanwhile, whatever country that does pay finds their funds being siphoned off to enrich trump.
They should absolutely refuse extortion like this. The tariffs will go as soon as the poorly educated figure out who actually paying them. Also, Epstein didn’t kill himself.
In today’s lesson it is South Korea that learns the US is not an ally and not a friend. It’s amazing the child-like naivety of these leaders. South Korea doesn’t have any economic or military partnership whatsoever, it just hasn’t realized it yet. It’s now going to be turned into a vessel state and the US will now will now instruct Korea’s economic, military and social policies.
I do not recall seeing a ratified trade agreement between the US and any other country. Frameworks are just that, concepts of an agreement not an actual biding agreement. Fuck trump, that is all. South Korea can say sure and do whatever they want. trump wants quick, cheap things that he can claim as a win. Have any of his investment “deals” borne any fruit? Answer: No.
Of course, what’s really going on here is solicitation of bribes, but the regime is such a mess I doubt South Korea can figure out who the bribes are supposed to go to.
I mean, other than the bribe of standing next to the Donald and promising billions in investments that you know will never happen.