‘the Slowest Negotiators Ever’: How Lagging South Korean Investment Pledges Are Hurting Its Us Security Relationship

President Donald Trump is reprising his first-term threats to pull the U.S. back from South Korean military exercises in part because of frustrations over the pace of Seoul’s $350 billion investment pledge, according to three people familiar with the discussions.

Trump on Sunday directed Defense Secretary Pete Hegseth to substantially scale back a planned joint military exercise with South Korea, citing the country’s lack of assistance with denuclearizing Iran.

But Trump’s threat is also driven by administration-wide economic frustrations with Seoul, said the people, who like others in this story were granted anonymity to discuss sensitive dynamics between the two countries. South Korea pledged last year to invest $350 billion in the U.S. but Trump officials believe its government is slow-walking its commitment.

“I think part of it is that Korea is treating this like a regular investment, in the sense that they want all the T’s crossed and the I’d dotted before they make an announcement, and that’s just not the way it works in a Trump administration,” said Victor Cha, the National Security Council director for Asia under former President George W. Bush and now the Korea chair at the Center for Strategic and International Studies.

The administration is also bristling at South Korea’s treatment of American e-commerce firm Coupang, which Korean regulators fined more than $400 million in June.

Trump’s latest threat underscores the president’s tendency to conflate countries’ economic and security relationships with the United States, with frustrations in one part of the relationship bleeding into his assessment of another.

“The president loves leverage,” said one of the people familiar. “You get leverage by being willing to use it and Trump does.”

The president also routinely touts nearly $20 trillion in investment pledges from foreign countries as a signature achievement of his second term and regularly compares it to what he claims is a much smaller amount that President Joe Biden secured.

On Monday, Commerce Secretary Howard Lutnick met with Kim Jung-kwan, South Korea’s minister of trade, industry and resources, to discuss the investments in a pre-planned meeting, according to one of the three people familiar and a fourth person who confirmed the meeting between U.S. and South Korean officials.

The Commerce Department did not immediately provide a readout of the meeting.

The two nations have held the annual joint exercises annually for more than 70 years in an effort to deter threats from North Korea. This year’s iteration, which began Monday, was expected to involve about 18,000 South Korean troops and a sizable portion of the 28,500 American troops stationed in the country.

Since his first term, Trump has questioned the value of the joint exercises, decrying them as costly and unnecessarily provocative toward North Korea and his “friend” Kim Jung Un, the nation’s authoritarian leader. This latest announcement comes as North Korea launched a new round of ballistic missile tests last week, and as Pentagon leaders consider plans to withdraw about 4,500 troops from South Korea, to be redeployed elsewhere in the Indo-Pacific region, a move Congress has generally opposed.

Trump also brought up troop commitments as part of the South Korea trade conversations last year, accusing them of “free-riding” on the U.S. military.

The president took it personally that South Korea, which the U.S. helps protect, did not rush to help when Trump attacked Iran. Trump cast it as an issue of “fairness” speaking to reporters in the Oval Office on Monday.

“When I called recently, the president of South Korea … I said, ‘Would you like to give us a little hand — we don’t need help with Iran, but if you’d like, give us a hand with Iran’ — he said, ‘no thanks,’ and I said, ‘What do you mean? We have 39,000 soldiers over there, guarding you from Kim Jong Un, your next door neighbor, and you’re not going to help us on a very easy military operation in Iran? That’s strange,’” Trump said. “Well, why are we involved in helping you?”

Asked for comment, the White House referred to Trump’s comments in the Oval Office. The South Korean embassy in Washington did respond to a request for comment.

A person familiar with Seoul's views on the matter said that it “seems that Trump just wants to punch South Korea due to his displeasure with its lukewarm response to his request for support in the Strait of Hormuz," and that the president’s announcement was aimed at "disguising that by talking about North Korea and Trump's good relationship with Kim Jong Un."

Still, Trump’s frustrations over the investments loom large over the relationship. While $150 billion of that pledge was set aside for shipbuilding cooperation, South Korea has yet to announce how the remaining $200 billion will be invested.

A second person familiar with the U.S. discussions with the talks noted that negotiations with South Korea have progressed more slowly than Trump administration officials expected and remain unsettled.

"They are the slowest negotiators ever,” the person said.

Trump threatened to raise tariffs on South Korea earlier this year from 15 percent to 25 percent because of delays with its parliament approving the trade agreement. It ultimately did so, and the tariffs never took effect.

Kim, the South Korean trade minister, said Sunday that the two countries are considering announcing new investment pledges at the end of August or early September but that “as we approach the final stage, various specific issues are emerging at the working level,” the Korea Herald reported. He made the remarks to reporters in Dallas, in what the Korean press described as an emergency visit to the United States amid ongoing U.S. dissatisfaction over the lack of investments.

South Korea is one of several countries that made massive investment commitments as a way to secure a lower tariff rate on its goods amid a barrage of tariff actions from Trump last summer, but the implementation of the fund has lagged, particularly in comparison with its economic rival, Japan.

Washington and Tokyo have already signed off on six projects that will receive money from its $550 billion investment commitment and have a list of potential projects in waiting — many of which were announced last October in a glitzy ceremony with CEOs.

Nearly a year after making its investment commitment, South Korea has yet to identify a single project — and the clock is ticking on fulfilling the pledge before the deal’s January 2029 deadline.

Phelim Kine contributed to this report.