South Korean Officials: $350 Billion Mainly Secured Loan to US Investment Fund, Direct Investment Below 5%! Japanese Official: Only 1-2% Will Be Actual Investment

The chief of staff for South Korea's president says that as part of the US trade agreement, South Korea has committed to investing $3.5 trillion mainly through secured loans rather than direct investment, aiming to alleviate domestic concerns about the scale and risks of the deal.

In a TV interview on Sunday, Kim Yong-beom emphasized that Seoul's actual equity commitment will remain below 5%, noting that the plan is designed to support commercially viable US projects that have been pre-screened, rather than providing unconditional financial support.

Kim said: "The most accurate way to understand $3.5 trillion is to view it as a secured loan ceiling." He referred to the country's support for Korean export-import banks and Korea Trade Insurance Corp., which will play a role in supporting Korean companies' participation in US projects.

Last week, the government of President Lee and the US reached a trade agreement, agreeing to set up a fund, with South Korea's comprehensive tariff ceiling for exporting goods to the US capped at 15%. This agreement helped South Korea avoid the worst-case scenario - a 25% import tariff. Otherwise, South Korea's export-oriented economy, which accounts for over 40% of GDP, would have been severely impacted.

Kim noted that South Korea's fund structure is similar to Japan's $5.5 trillion commitment, with both mainly secured through guarantees. A Japanese official has said that only 1-2% will be actual investment; South Korea expects a similar ratio.