President Lee Jae Myung warned that South Korea's economy might face a catastrophic downturn comparable to the 1997 financial crisis if the administration agrees to existing US proposals in the deadlocked trade negotiations without proper protective measures.
According to Lee, no formal agreement has been reached yet due to disagreements regarding investment management procedures.
However, commercial and security discussions with the US, which serves as South Korea's defense partner and major trading ally, are casting a shadow over Lee's upcoming journey starting Monday to New York. There, he will speak before the UN General Assembly and become the first South Korean leader to preside over a Security Council session.
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Lee, who represents the liberal faction, assumed the presidency following a special election in June after his conservative predecessor Yoon Suk Yeol was impeached and imprisoned for temporarily declaring martial law. Lee has worked to stabilize both the nation and its financial system, stating his intention to use the American visit to communicate that "democratic Korea has returned."
During their initial meeting in August, Lee and Trump established what Lee described as a solid personal relationship with the American president, though they failed to produce a joint declaration or specific commitments.
Earlier this month, the Trump administration created turmoil in South Korea by detaining over 300 South Korean employees at a Hyundai Motor battery facility in Georgia, with federal authorities charging them with immigration infractions.
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Nevertheless, Lee stated that the operation would not damage the bilateral partnership, commending Trump for proposing to allow the workers to remain. Lee expressed his belief that Trump did not order the action directly, attributing it instead to excessive enforcement efforts.
Commerce Secretary Howard Lutnick has suggested that South Korea should mirror Japan's agreement with the US. He indicated that Seoul must either embrace the arrangement or face tariffs, employing the Trump administration's characterization that foreign nations bear the cost of these duties, though they are actually paid by American importers.
South Korea has suggested establishing a currency exchange swap agreement with the US to minimize the impact of investments on the domestic won market.
Lee did not discuss the likelihood of US approval or whether such an agreement would be sufficient for the deal to proceed.
He noted that South Korea differs from Japan, which reached a trade agreement with the US in July. Japan possesses more than twice South Korea's $410 billion in foreign currency reserves, maintains an international currency with the yen, and has a swap arrangement with the United States, according to Lee.
Both Seoul and Washington have documented that investment projects must demonstrate commercial viability, though finalizing the specifics has proven challenging, he stated.
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Trump indicates the investments will be "chosen" by him and managed by the US, giving Washington authority over investment destinations.
However, Lee's policy advisor Kim Yong-beom mentioned in July that South Korea had implemented a protective measure to minimize financial risk, which includes backing commercially sound projects instead of offering unconditional monetary assistance.
Lee stated that South Korea and the US share agreement on expanding Seoul's defense spending contributions, supported by 28,500 American forces stationed on the Korean peninsula, though Washington prefers to maintain separate discussions for security and trade matters.
Lee has worked to ease tensions with nuclear-capable North Korea. Pyongyang has rejected the South's diplomatic efforts, and Lee expressed pessimism regarding the possibility of inter-Korean negotiations in the near future.
Throughout their discussion, Lee urged Trump to attempt another meeting with North Korean leader Kim Jong Un during Trump's upcoming visit for an Asia-Pacific summit that Lee will organize in the South.