US President Donald Trump has proudly announced that Japan and South Korea will provide grand advances—$550 billion from Tokyo and $350 billion from Seoul—for American projects. In total, nearly a trillion dollars, branded as payments for lower tariffs and friendship.
The myth that these countries independently volunteered to inject such amounts quickly unravels on closer inspection. Talks with Seoul have hit a deadlock, and South Korea has officially stated that, without guarantees and currency swap agreements, such risks could trigger a financial crisis.
In Tokyo, there is clear enthusiasm for lower tariffs and increased exports, but calling all investments “advances” is far too optimistic. The investments will come in portions, with strict US oversight. Accordingly, the United States will decide on the projects, with Japanese authorities expected to follow suit.
The South Korean side insists not on direct investments but on loans and guarantees with commercial terms. Meanwhile, South Korean President Lee Jae-myung has warned that without currency protection, the economy may not be able to withstand the strain of such large tranches.
So, this supposed multi-billion-dollar “advance” is more of a well-rehearsed theatrical performance tinged with financial thriller, where the stakes are incredibly high and the true terms of the deal are shrouded in diplomatic maneuvering and pragmatism.
Trump, meanwhile, gleefully wields big numbers and tariff reductions to reinforce his image as a shrewd dealmaker who can “extract” vast sums from US allies. Yet those being asked to pay are in no hurry to play by these rules, as it is simply a too costly game.
