South Korea and Japan are pushing back against President Donald Trump's massive financial demands. South Korea's National Security Adviser Wi Sung-lac stated that the $350 billion cash demand is "objectively and realistically not a level we are able to handle" š°.
*South Korea's Concerns:* š°š·
- The demand equals over 80% of South Korea's foreign currency reserves š
- Without a currency swap agreement, the investment could severely damage the country's economy šø
- Seoul suggests a combination of investments and loan guarantees instead of cash š
*Japan's Stance:* šÆšµ
- Potential renegotiation of the $550 billion deal if it fails to serve Japan's interests š
- State-backed agencies JBIC and NEXI won't fund projects that don't directly benefit Japan šÆšµ
- Only 1-2% of the total mechanism would be actual investments, with the rest consisting of loans and guarantees š
*What's Next:* š¤
- Further negotiations expected during the APEC Summit in Gyeongju, South Korea, in November š
- Japan's ruling Liberal Democratic Party will elect its new leader on October 4, adding uncertainty to the situation š³ļø
*Market Impact:* š
- Failure to finalize the deal could lead to higher tariffs and economic instability for South Korea and Japan š
- Markets are closely watching the developments, with potential implications for global trade and finance š
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