Trump’s Unequal Investment Demands: A Threat to Korea

Audio report: written by reporters, read by AI

Lee Ha-kyung

The author is a senior columnist at the JoongAng Ilbo. 

Henry Kissinger, the late U.S. secretary of state, cowrote "The Age of AI and Our Human Future" (2021) with Eric Schmidt and Craig Mundie, and in that work he references the Finnish national epic "Kalevala" (1835). In that story, the immortal blacksmith Ilmarinen, at the demand of an old sorceress, forges the Sampo, a magical mill that produces endless gold and treasure for its owner. The story was used as an allegory to show the promise of artificial intelligence.

To President Donald Trump, Korea is now a kind of Sampo. He has demanded that Seoul invest $350 billion of its foreign exchange reserves — 84 percent of the nation’s $410 billion total — in the United States. Washington would decide when and how the money is used and then take 90 percent of the profits. Even Shakespeare’s Shylock would be shocked by such terms. President Lee Jae Myung refused, warning that accepting would mean both his impeachment and a foreign exchange crisis. But Trump pressed further, describing the demand as an “upfront” payment in exchange for reducing tariffs by 15 percent. Commerce Secretary Rutnick went a step further, asking for even larger sums. To many in Korea, this looks like a relentless pattern of zero-sum pressure.

Japan has already pledged $550 billion to Trump in order to preserve auto exports. Unlike Korea, Japan can absorb such costs. Its reserves exceed $1.3 trillion, more than three times Korea’s, and the yen enjoys reserve currency status. Tokyo also maintains an unlimited currency swap line with Washington. When Seoul asked for such a facility, the U.S. dismissed the request. The message to Korea was blunt: America made you wealthy, so return the profits.

This moment reflects a trajectory long in the making. In 2016, when Trump first campaigned for the White House, former assistant secretary of state Robert Einhorn told the writer that Trump could never be elected, and even if he were, the U.S. system would contain him. That prediction proved wrong. Once in office, the “elected emperor” began reshaping alliances with fiery rhetoric and transactional demands. But Trump had foreshadowed these moves decades earlier. In 1987 he bought newspaper ads accusing allies of free-riding on American security while getting rich at U.S. expense. The tariff bombs and cash demands Korea now faces were already visible 38 years ago.

Trump thrives on Hobbesian realism, zero-sum bargaining and narrow definitions of national interest. With his America First banner, he has undermined the liberal international order the U.S. once defended. In 2016, 50 Republican national security officials issued a joint statement that a president must be restrained, deliberate and emotionally stable, noting that even America’s closest allies felt insecure under Trump’s whims. Stanford University economic historian Niall Ferguson defined “Trumpism” as “taking advantage of the fact that all other countries are weaker than the United States in order to bully them.” (Joseph Nye, "Is the American Century Over?" (2015))

President Lee was right to reject the humiliating proposal. Still, behind the scenes, Seoul must work harder to explain its situation, to persuade and to compromise. Business leaders such as Ryu Jin of the Federation of Korean Industries and Shinsegae chair Chung Yong-jin will have to assist. Anti-American rhetoric would serve no purpose. Instead, Seoul needs practical bargaining chips that allow Trump to save face. Further market openings for rice or beef might provide such an outlet — though these moves would require careful management of domestic opinion.

Religion also plays a role in Trump’s network. He maintains close ties with conservative American pastors like Franklin Graham and Paula White, who heads the White House’s Religious Freedom Commission. Korean church leaders Kim Jang-hwan of Far East Broadcasting and Lee Young-hoon of Youido Full Gospel Church are personally close to them. The fallout from the special counsel’s investigation into former president Yoon Suk Yeol and First Lady Kim Keon Hee, as well as probes into the Unification Church, complicate matters. Trump’s ally, former House Speaker Newt Gingrich, even claimed that Korea’s left-leaning government was intent on destroying Unification Church leader Han Hak-ja, known as “Mother Moon.” Such religious entanglements could affect diplomacy.

What is striking is the silence of Korea’s conservative opposition. Though they champion the alliance, they have refrained from criticizing U.S. pressure. This is puzzling. A strong but measured critique would both send a message to Washington and unite domestic opinion. Yet the ruling bloc itself shows little willingness to compromise. Its leader has refused dialogue, saying he will not shake hands with “forces of insurrection.” Attacks on the Supreme Court threaten the principle of separation of powers. At such a critical moment, hard-liners protecting their own interests are paralyzing efforts at national unity.

Korea now faces a compounded crisis born of Trump’s economic and security demands. The country cannot afford disunity. Overcoming this challenge will require consensus at home. For that, the Lee administration must take the lead with magnanimous decisions. Only through domestic cohesion can Korea withstand the storm blowing from Washington.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.