Rutnick's 'Non-Negotiation on Investment Obligation' and Kim Jeong-gwan's 'Special Act Priority' Expose Tariff Breakdown

Rutnick's 'Non-Negotiation on Investment Obligation' and Kim Jeong-gwan's 'Special Act Priority' Expose Tariff Breakdown

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Minister of Trade, Industry and Energy Kim Jeong-gwan demanded that US Secretary of Commerce Rutnick prioritize Korea's special law. The US, instead of prioritizing the agreed-upon $20 billion in investment, refused to negotiate the investment obligation.

The New York talks collapsed, turning the stalling tactics toward a breakdown in the trade agreement. Korean media outlets, praising Minister Kim's remarks that "both sides have deepened their understanding," reported the negotiations as "ongoing."

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At a meeting at the US Department of Commerce on the 29th, Minister Kim emphasized Korea's "Special Act on Investment in the United States" as a "definite position in negotiations," citing Korea's "willingness to implement" investment in the US. Rutnick had previously declared Korea's "special act" as a "means to avoid implementing investment obligations," suggesting the breakdown of negotiations was already imminent.

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Kim Yong-beom, Director of Policy, said on the 28th, "Even if we strive to pass the bill in the National Assembly and both countries jointly review the project, we must naturally adjust it considering the foreign exchange market. It's also written in the fact sheet." He added, "You can't just send money regardless of the exchange rate just because you're raising tariffs, right?" He stated that the proposed law would be "exchange rate priority," not a special law.

Director Kim continued, "The US is aware that in Korea, the process for the US investment fund can only begin after the deliberation on the law is complete." He added, "We need to consider ways to conduct some preliminary review (even before legislation). We plan to consider ways to initiate preliminary procedures, such as by creating guidelines through a resolution at the Ministerial Meeting on External Economic Affairs."

He stated that the investment fund agreed upon with the US would be "domestic priority in Korea, with external agreements taking precedence." At a White House press conference on October 15th of last year, President Trump announced, "We've reached a tremendous deal of $650 billion. That's what they're paying us," adding, "Both Japan and South Korea have signed on."

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He continued, "South Korea has agreed to pay $350 billion, and Japan has agreed to pay $650 billion upfront. They're both satisfied." Immediately following these remarks, Director Kim traveled to the United States on October 16th, returned on the 24th, and announced at an APEC briefing in Gyeongju on the 29th, "We've agreed on the details of the tariff negotiations with the United States."

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Director Kim then told reporters at the Blue House on the 28th that even after the passage of the special law, "we can't immediately provide a $20 billion investment," and that "the exchange rate is the priority," raising the possibility of a breakdown in negotiations.

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Director Kim specifically distinguished between the "government" and the "National Assembly," stating, "Considering what President Trump said, the South Korean government was not the target." He added, "It can be interpreted that the US was dissatisfied with the delay in implementing the tariff agreement due to the National Assembly's lack of swift passage of the bill. At the time (of the summit agreement), there was no disagreement between South Korea and the US on the need for National Assembly ratification.

Disagreements over the need for ratification were not the cause of the incident between South Korea and the US." The report stated that President Trump had targeted the National Assembly, not the South Korean government, when announcing his tariff hike plan.

Director Kim's remarks appear to be a move to "terminate the South Korea-US summit tariff and trade agreement" using the National Assembly as a pretext.

Director Kim, who negotiated the summit through the $350 billion Aepo investment in the US, raised the issue of the exchange rate after the "conclusion" and then raised the possibility of conflict over the timing of the annual investment of up to $20 billion in the "installment agreement." Director Kim stated, "(The high exchange rate situation) is a stark reality. That's why US Treasury Secretary Scott Besant made the unusual statement that the Korean exchange rate is 'undervalued.'"

He added, "Even if we work to pass the bill in the National Assembly and both countries jointly review projects, we must naturally adjust the foreign exchange market. It's even stated in the (South Korea-US) fact sheet. Just because (the US) raises tariffs, we can't just put everything else aside and send money regardless of the exchange rate, right?" He hinted at the possibility of a halt in investment.

The US Department of Justice released documents related to convicted sex offender Jeffrey Epstein on the 31st, and media outlets began reporting on the incident.

Secretary Lutnick's remark about the "duty to invest" was based on reports from attendees at a Samsung Washington DC event the previous day (the 28th) where he stated that Korean investment in the US was "not optional. It's mandatory."

Korean media outlets then altered this report, removing the "duty" and stating, "It's not optional." The Korea Times reported on the 30th from Washington that <Secretary Rutnick was not the only one to comment in his congratulatory address that “the cooperation between the two countries that is needed now is investment in the United States” and that such investment is “not a choice but a fulfillment of a promised obligation”>.

On the same day, US Treasury Secretary Scott Besant told the US economic media outlet CNBC that “there is no trade agreement with Korea until the Korean National Assembly approves the trade agreement.”

US Trade Representative Jamison Greer also said in an interview with the US economic news channel Fox Business the previous day, “It is difficult for us to continue to keep our promise (tariff reduction) while they (Korea) are not quickly fulfilling their promise.” Minister Kim's "Korea Special Act Prioritizes" remarks were reported on the 30th by KBS from New York, which stated, "Our government is reportedly persuading the withdrawal of the tariff increase by suggesting that it can consider prior consultations with the US on investment projects even before the passage of the special act."

The KBS reported, "While the timing of the passage of the special act, which is the National Assembly's exclusive authority, cannot be guaranteed, the intention is that by conducting prior consultations between Korea and the US on investment in the US, the timing of investment implementation can be brought forward after the act is passed."

Minister Kim's new proposal, based on the principle that "Korea's special act is separate from the US investment agreement," is summarized as "the special act grants bilateral exemptions" and "prior consultations on investment projects are necessary to advance the KRW 20 billion investment."

This new proposal was first agreed upon by Minister Kim and Secretary Lutnick on "$350 billion + investment by large corporations."

The summit was then held and announced as a "conclusion" and "agreement." Subsequently, the two leaders agreed on "installment payments." Subsequently, at working-level talks, a fact sheet document was written stating, "As a requirement for installment payments, a retroactive tariff reduction from the first day of the month the special law was proposed, with an annual investment of $20 billion." Based on the text, it appears that "special law proposal, tariff reduction, and $20 billion investment" were part of last year's "provisional agreement."

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The Lee Jae-myung administration delayed implementation of this "provisional agreement" as much as possible. The core of the agreement, the "construction of nuclear submarines," was abandoned at the Philadelphia Shipbuilding Complex in the United States, with construction to be conducted in Korea. The strategic objective was revised to "transfer and possess military nuclear weapons." The Trump administration, in response, appears to have halted implementation of the agreement, including nuclear submarines, by "restoring the 25% tariff."

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The U.S. Department of Justice released millions of new files on convicted sex offender Jeffrey Epstein on the 31st, including an email that appears to show Commerce Secretary Howard Lutnick visiting Epstein's estate for lunch.

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Reuters confirmed this, reporting that day that "in another email, billionaire and former Trump adviser Elon Musk asked if Epstein was planning a party but declined an invitation to visit the island." "Reflecting Epstein's elite circle, the documents also mention numerous prominent figures in politics, business, and entertainment, notably Trump himself, who was friends with Epstein long before his crimes came to light."

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Reuters continued, "Trump's nominee for the next Federal Reserve chairman, Kevin Warsh, appeared in an email sent to Epstein by his publicist on the 31st. The email listed 43 people attending the Christmas gathering, including celebrities like Martha Stewart. It was unclear whether Warsh, the Fed chairman nominee, knew Epstein or why Epstein received the note, and Warsh had no immediate comment."

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The Reuters report, which focused on the emails related to Commerce Secretary Lutnick, states:

According to the emails, Epstein and Lutnick had lunch scheduled on Epstein's Caribbean island of Little St. James on December 23, 2012. That morning, Lutnick's wife told Epstein's assistant, "We're heading towards you from St. Thomas," asking where they would dock.

A day later, Epstein's assistant sent Lutnick a follow-up letter from Epstein saying, "It was nice to meet you." In November 2015, an aide to Epstein forwarded an invitation from Lutnick to a fundraiser for Democratic presidential candidate Hillary Clinton at a financial firm. Clinton lost the 2016 presidential election to Trump. Campaign finance records show Lutnick donated $2,700 to the Clinton campaign, the maximum legally allowed at the time.

The emails appeared to contradict statements made by Lutnick on a podcast last year. Lutnick said Epstein, then her next-door neighbor, invited her and her wife to a tour of Epstein's townhome around 2005, where the financier made sexually suggestive comments about a massage table he had installed.

Lutnick said she vowed never to "be in the same room" with Epstein again.

The documents were released weeks after a December 19 deadline set by Congress, which passed a bipartisan bill requiring the release of the Epstein files, despite months of attempts by Trump to block it. Many posts were heavily deleted, which Blanche said was done to protect victims and ongoing investigations under exceptions allowed by law. For example, in one 82-page document, all but one page was blacked out.

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