U.S. Investment Push Could Spark Financial Meltdown in S. Korea

(MENAFN) South Korean President Lee Jae-myung has issued a stark warning that his nation could face a financial crisis comparable to the 1997 meltdown if it complies with U.S. investment demands without protective measures, a media outlet reported Monday.

"Without a currency swap, if we were to withdraw 350 billion U.S. dollars in the manner that the U.S. is demanding and to invest this all in cash in the U.S., South Korea would face a situation as it had in the 1997 financial crisis," Lee stated during an interview with the media outlet on Friday.

The July verbal agreement between South Korea and the U.S. involves Seoul committing to invest $350 billion in the United States in return for Washington’s reduction of tariffs on South Korean exports.

South Korea’s foreign currency reserves totaled $416.29 billion at the end of August, and Seoul has proposed establishing a foreign exchange swap line with Washington to mitigate risks.

Responding to the recent U.S. immigration raid at a South Korean factory, President Lee acknowledged the widespread anger among South Koreans over the severe treatment of workers and warned that the incident might discourage Korean companies from investing in the United States.

On September 4, U.S. Immigration and Customs Enforcement (ICE) conducted a raid on the construction site of an electric vehicle battery plant operated by a Hyundai Motor Group and LG Energy Solution joint venture.

The operation led to the arrest of 475 people, including 316 South Korean workers detained at the Folkston detention center in Georgia.

"I do not believe this was intentional, and the U.S. has apologized for this incident, and we have agreed to seek reasonable measures in this regard and we are working on them," Lee said, as quoted by the media outlet.

MENAFN22092025000045017169ID1110091815