US asks South Korea to ‘lead manufacturing fund’

The US has asked South Korea to lead a multi-billion-dollar "manufacturing cooperation enhancement fund" amid the ongoing tariff negotiations, a media report claimed on Wednesday.

It said the fund is aimed at "bolstering American manufacturing," reported The Chosun Daily, citing unnamed South Korean government officials in Seoul.

If materialized, the fund would "provide financing for (South) Korean firms to build or expand factories in the US or invest in local partners."

There was no official confirmation from Seoul or Washington about the report.

Earlier, the Trump administration asked Seoul to ease trade barriers in agriculture and digital data.

It said the idea floated by Washington was similar to a proposal from Japan -- to "establish a sovereign-style fund to support American industry."

Tokyo has reportedly proposed a $400-billion fund to the US side during its own trade negotiations that have so far failed to reach an agreement.

Seoul is holding talks with Washington for a deal on tariffs after US President Donald Trump announced new levies, up to 25%, on imports from South Korea. The tariffs are expected to take effect Aug. 1 if no deal is reached.

Trump has also imposed 50% tariffs on copper imports, one of the major export items from South Korea.

The US-South Korea bilateral trade volume hovered around $197 billion last year, with Washington's trade deficit with Seoul at $66 billion.

According to the report, Trump officials raised demand for the fund on two occasions earlier this month.

Yeo Han-koo is leading the negotiations on South Korea's side and has held talks with US Commerce Secretary Howard Lutnick.

The Seoul side has offered Washington to open up South Korea's agricultural markets and relax digital map export restrictions, while the US appears interested in the fund, the report added.

As the Aug. 1 deadline approaches, South Korean chief trade negotiator Yeo said Monday: "We are not going to sacrifice substance for speed."

"Rushing to meet the clock at the expense of national interest is not an option," he added.