Trump Holds Firm.

• Follow-up tariff negotiations have collapsed. Kim Jung-kwan (Minister of Trade, Industry and Energy), who met with Howard Lutnick (U.S. Secretary of Commerce), returned empty-handed.
• While both sides agreed to reduce mutual tariffs and auto tariffs from 25% to 15%, Trump has yet to sign off.
• Kang Yu-jeong (Presidential Office Spokesperson) stated, “Negotiations are ongoing to align positions by adjusting conditions.”
• Related Link.

Kim Yong-beom’s Explanation Was Different.

• Kim Yong-beom (Presidential Office Policy Director) explained at a press conference immediately after the July tariff negotiations, “It seems the concept is that if profits arise, they should be reinvested in the U.S.”
• Kim Yong-beom described the $200 billion as a capital call structure—not pooling the full amount at once but raising a portion first, then investing funds incrementally as needed. He cited an example: “If equity (own funds) is less than 5%, the remainder is covered by loans and guarantees.”
• Trump’s reaction suggests either Kim Yong-beom misunderstood, interpreted the terms favorably, or left conclusions ambiguously open—allowing the U.S. to seize on weaknesses and attack.
• Related Link.

What Matters Now.

No Deal Unless Korea Follows Japan’s Lead.

• Donald Trump (U.S. President) has set two conditions.
• First, the South Korean government must invest $350 billion in cash, with the U.S. government (Trump) deciding the investment targets.
• Second, profits must be split 50-50 until the investment is recovered, after which 90% goes to the U.S.
• Japan accepted most of the U.S. demands, and starting tomorrow, Japanese cars will face a 15% tariff on U.S. exports.

25% Tariffs Might Be the Better Option.

• There is talk of a situation where 18 trillion won is being sacrificed to protect 488 trillion won.
• Choi Suk-young (Director of the Gwangjang International Trade Research Institute) said, “The U.S. seems to want a form where Korea hands over $350 billion,” and added, “We need to prepare for the worst-case scenario.”
• Jang Sang-sik (Director of the Korea International Trade Association’s International Trade Research Institute) pointed out, “In the worst-case scenario, we need to keep the option of enduring tariffs as one of our alternatives.”
• Na Won-jun (Professor at Kyungpook National University) said, “It would be better to cancel investments in the U.S. altogether, diversify export markets, and shift the economic model toward a domestic focus.”
• “The shock and pain would be significant,” he added, “but it’s necessary to build national consensus.”
• Related Link.

Currency Swap Request Rejected.

• Reports also surfaced that the South Korean government requested a currency swap from the U.S. government, which was rejected.
• South Korea’s foreign exchange reserves stood at $416.2 billion as of end-August. The $350 billion requested by the U.S. amounts to 84% of those reserves. A government official stated, “Concessions from the U.S. are necessary.”
• Even if Seoul wanted to comply with U.S. demands immediately, it is currently impossible. Some analysts suggest preparing for a protracted battle until after the APEC summit.
• Related Link.

Better to Spend on Export Firms Instead.

• This is the advice of Dean Baker (Economist, Center for Economic and Policy Research).
• “It’s extremely foolish for Korea and Japan to accept these agreements,” he said, adding, “It would be better to spend one-twentieth of Trump’s demanded amount supporting workers and businesses harmed by export declines.”
• If mutual tariffs rise from 0% to 15%, South Korea’s exports to the U.S. would drop from $132 billion to $125 billion. At 25%, they would fall to $112.5 billion.
• Is giving the U.S. $350 billion to prevent a $12.5 billion export decline really the best option? It’s time to ask questions.
• Japan, somehow caught in this trap, has already signed. To prevent a $14 billion export loss if tariffs rise from 15% to 25%, they agreed to invest $550 billion in the U.S.
• Baker remarked, “They may think this is rational, but it makes no sense.”
• Related Link.

Deep Dive.

70-Person Room, Drinking Water Where Spiders Float Beside Toilets.

• These are the horrifying accounts from Korean workers detained and later released by U.S. Immigration and Customs Enforcement.
• 35 bunk beds were spaced 1 meter apart, but even that wasn’t enough—some slept on mattresses laid directly on the floor.
• A single shared toilet was placed in the room.
• The food was equally appalling. One testimony described being bound at the waist and hands, forced to bow their head and lap water like an animal.
• Interviews began on the third day, and only after completing them sequentially could detainees be moved to 2-person cells.
• No Miranda warnings were given. When officers presented documents, the intimidating atmosphere made it impossible to carefully read or translate the English line by line before signing.
• Related Link.

If We Must Fight, Let It Be on Korean Soil.

• They had to sign Form I-120 before release.
• It included statements like, “I acknowledge that entering the U.S. illegally is a crime,” and “I pledge not to attempt illegal reentry.”
• Some refused, asking, “Why should I admit guilt when I’m not guilty?” but were persuaded by the foreign ministry that “no disadvantages would follow.”
• A few insisted on staying for trial, but a ministry official reportedly urged, “The trial will take too long.” A consulate officer added, “Going home is the priority,” and allegedly said, “Just sign whatever they ask.”
• Related Link.
• Related Link.

“What’s Wrong with a Sedition Trial Division?”.

• These are the words of Han Jeong-ae (Policy Committee Chair, Democratic Party).
• It’s not about adding courts—just proposing a dedicated division at Seoul Central District Court. The stance is that if the judiciary doesn’t act, the legislature will push forward.
• Seoul Central District Court previously established an Intellectual Property Specialized Division in 2017. Han stated, “There have been discussions about establishing a labor court, but I’ve never heard it raised as a constitutional issue.”
• The Hankyoreh analyzed, “The ball has been passed to the courts to avoid constitutional disputes.”
• The Supreme Court Administrative Office conveyed to the legislature, “Careful review is necessary.” Article 101, Clause 1 of the Constitution stipulates, “Judicial power shall be vested in courts composed of judges.” The office argues that “appointing judges to preside over trials only after indictment could infringe on the constitutional right to be tried by judges appointed under the Constitution and laws” (Article 27, Clause 1).
• Related Link.
• Related Link.

Cho Hee-dae Must Resign.

• Choo Mi-ae (Democratic Party lawmaker) posted, “Judicial independence can only be preserved if the person obstructing it and undermining the speed and fairness of sedition trials steps down.”
• The criticism targets Chief Justice Cho Hee-dae, who convened a meeting of court presidents to voice discontent over judicial reforms. “For the judiciary to fully fulfill its dedicated mission, the independence of trials must be unequivocally guaranteed,” he stated.
• Choo Mi-ae added, “The judiciary has repeatedly handed pardons to sedition forces and acted as a ‘judicial laundromat’ that cleansed their crimes.”
• Related Link.

Controversy Over the Hierarchy of the Three Branches of Government.

• Lee Jae-myung (President) stated at a press conference, “There is a clear hierarchy of power,” adding, “The highest power is the people, followed by directly elected power and indirectly elected power.”
• JoongAng Ilbo criticized this as “an unconstitutional remark that misinterprets the democratic principle of checks and balances.”
• Jang Young-soo (Korea University professor) pointed out, “If elected power is to be above appointed power, how would you explain Yoon Suk-yeol’s impeachment by the Constitutional Court and the invalidation of lawmakers’ elections based on criminal trial outcomes?”
• “The story is that even popular sovereignty is not absolute, and accepting the ‘limitations of majority rule’—where majorities can make wrong judgments due to temporary emotions or manipulation—is the basis of the separation of powers.”
• Kim Seung-dae (lawyer) noted, “Judicial independence presupposes not only the independence of trials but also the independence of judges’ composition and organization,” adding, “The legislature’s attempt to create a trial division because it distrusts specific judges’ rulings is unconstitutional.”
• Related Link.

Another Take.

Sado Mine Memorial Service Omits Mention of Forced Labor.

• It was held last Saturday in Sado, Japan. Only harsh working conditions were mentioned—no fundamental reckoning with the forced abduction of Koreans.
• Kyeongyang Shinmun criticized, “It poured cold water on the goodwill of the South Korean government and people striving to move forward by overcoming the past.”
• The presidential office limited itself to stating, “We will continue discussions.”
• Related Link.

Government Borrows Record 145 Trillion Won from Central Bank.

• It’s the highest level in history. It increased further through two supplementary budgets.
• Woo Suk-jin (Myongji University professor) pointed out, “Since the Yoon Suk-yeol administration, borrowing from the central bank has become a permanent tool.”
• Using the Bank of Korea like a negative-checking account, interest costs reached 44.6 billion won as of April.
• Woo Suk-jin criticized it as “a workaround to conceal fiscal vulnerability and failure in revenue management.” “The central bank should not be an ‘ATM’ manipulated by government convenience, but the last line of defense preserving monetary policy independence,” he argued.
• Woo Suk-jin emphasized, “The repeated ‘non-cosmetic accounting that is cosmetic’ must stop.”
• The solution? When tax revenue falls short of the budget, fiscal bonds and short-term treasury bills should be issued. Interest rates and supply-demand are adjusted by market principles, and market evaluation and checks naturally take effect.
• Related Link.

560,000 Left Out of Consumption Voucher Scheme.

• First-round livelihood recovery consumption voucher applications reached 99%. 50.05 million applied, leaving 560,000 unclaimed. 9.0634 trillion won was disbursed.
• A government official met by Kukmin Ilbo said, “Despite efforts including outreach applications, a significant number still refuse, saying ‘I won’t participate.’”
• The second round excludes the top 10% by assets/income, offering 100,000 won each. Applications open from the 22nd to the 31st of next month.
• Related Link.

“Why Not Buy Stocks?” Pension Fund Purchases 1.863 Trillion Won Worth the Next Day.

• Lee Jae-myung (leader of the Democratic Party) said, “Domestic pension funds have a low investment proportion in domestic stocks.” The next day, the pension fund bought stocks.
• As of the end of June, the National Pension Service’s assets totaled 1,269 trillion won, of which 189 trillion won is in Korean stocks. Overseas stocks amount to 446 trillion won.
• The National Pension Service Fund Management Committee plans to reduce the proportion of Korean stocks from 15% to 13% by the end of 2029. Since reserves continue to grow, even with a reduced proportion, stock purchases must increase.
• Chosun Ilbo pointed out, “There are concerns that the relatively small domestic stock market will deepen the ‘whale in a pond’ phenomenon, where a single major investor dominates.” Even if the stock proportion is lowered to 13%, an additional 286 trillion won worth must be purchased.
• Related Link.

Taiwan’s Per Capita GDP Overtakes South Korea’s.

• South Korea’s per capita GDP is projected to reach $37,430 this year, while Taiwan’s is expected to hit $38,066. These figures are based on the South Korean government’s forecast and Taiwan’s statistics agency, respectively.
• It marks the first time in 23 years since 2003.
• Taiwan’s semiconductor exports have surged significantly. Its statistics agency forecasts growth of 4.45% this year and 2.81% next year. The Bank of Korea projects South Korea’s growth at 0.9% this year and 1.8% next year.
• Taiwan is likely to surpass $40,000 in per capita GDP next year.
• Park Jung-woo (Nomura Securities economist) warned, “The status and role of South Korean tech companies have sharply declined in recent years.”
• Related Link.

Jang Dong-hyeok Visits Son Hyun-bo’s Church, Accused of “Religious Oppression”.

• Son Hyun-bo (pastor of Segyero Church) remains detained on charges including violations of the Public Official Election Act. He is a conservative figure acting as a central force behind “Yoon Again.”
• Jang Dong-hyeok (People Power Party leader) attending Segyero Church’s service can be seen as an attempt to consolidate far-right Protestant groups and asphalt-right factions.
• Related Link.

International Ties Behind Election Fraud Conspiracy Theories.

• The Korea Conservative Political Action Committee (KCPAC), linked to U.S. Republican networks, is a prime example. Its founder is Annie Chan.
• It promotes itself as the Korean version of the Conservative Political Action Conference (CPAC) and has spread election fraud conspiracy theories alongside Mos Tan (Liberty University professor) and others.
• Seo Myung-sam (Sogang University professor) analyzed, “Son Hyun-bo has a direct connection to Charlie Kirk’s Turning Point USA through Build Up Korea.”
• Sim Ha-bo (pastor of Eunpyeong Jeil Church) is leading a petition to appoint Mos Tan as a U.S. ambassador.
• Related Link.

“Radical Left Lunatic Group.”.

• Surprisingly, this was said by the U.S. president. Political tensions have boiled over since the assassination of Charlie Kirk.
• According to Reuters, cases of people being fired for criticizing Kirk are also increasing. Open witch hunts are underway.
• Steven Levitsky (Harvard professor) warned, “This could become a trigger for Trump to deploy the military.”

The Yeouido President and the Chungjeongno President.

• This refers to Lee Jung-ryul (Democratic Party leader) and Kim Eo-jun (Ddanzi Ilbo CEO), respectively.
• Woo Sang-ho (Presidential Office Political Affairs Chief) was interviewed by Chosun Ilbo and fell for a loaded question. While stating, “It’s not appropriate to keep referring to various influential figures as ‘presidents’” and “The only president leading South Korea now is Lee Jae-myung,” he ended up reinforcing the frame.
• Regarding claims that Kim Hyun-ji (Cabinet Secretary) manipulated personnel decisions, he dismissed them as “excessive speculation,” calling her “intelligent and devoted to her duties,” and countered, “The real power lies with Kang Hoon-sik (Presidential Office Chief of Staff).”
• Related Link.

The Fix.

An Experiment at Seoul’s Gangnam-gu Health Center.

• Lee Jong-cheol (Gangnam-gu Health Center director) is seventy-six years old this year. He served as the personal physician to Lee Kun-hee (former Samsung Group chairman) and rose through the ranks after leading the Changwon Health Center. He says he wanted to create a model for public healthcare.
• He consults three patients for one hour each, every Wednesday.
• He established an emergency room on the first floor of the health center.
• He added a dementia ward to the municipal nursing hospital. These experiments are possible only with Gangnam-gu’s support.
• Lee Jong-cheol sees the problem as the reality that essential medical care is rarely profitable.
• His next goal is to expand home-based treatment: “No one wants to die in a hospital. People want to stay healthy at home for as long as possible and die there. For that, home-based care must properly integrate welfare and medical services.”
• Related Link.

Power Surplus? More Plant Shutdowns.

• Power production overflows in spring and autumn, yet infrastructure like ESS (energy storage systems) remains critically insufficient.
• According to the Ministry of Trade, Industrial, and Energy, renewable energy output curtailment reached 72.3 GWh in the first half of this year—3.6 times the 20 GWh curtailed annually last year. Nuclear power output curtailment also occurred 25 times in the first half alone.
• While power shortages are problematic, surpluses can also trigger blackouts, forcing automatic shutdown mechanisms to activate.

Gyeonggi Province’s Subprime Loan Delinquency Rate Hits 74%.

• This was a project pushed by Lee Jae-myung (President) during his tenure as Gyeonggi Province governor.
• Loans of up to 3 million KRW at 1% annual interest were given to 110,000 people in the lowest 10% credit tier—but five years later, three out of four borrowers are delinquent. The budget amounted to 137.4 billion KRW.
• 35% have extended their deadlines, but 39% are completely unreachable.
• In an editorial, Chosun Ilbo criticized, “Ignoring financial principles inevitably leads to market failure, and the burden falls on the public.” It argued, “Rather than artificially lowering rates, building the credit capacity of subprime borrowers is the real way to help the vulnerable.”
• Related Link.
• Related Link.

ICYMI.

South Korea Tops Global Preference for Daughters.

• Gallup International surveyed 44 countries.
• 65% said gender didn’t matter, while 16% preferred sons and 15% daughters.
• In South Korea, 56% said gender didn’t matter, with 15% preferring sons and 28% daughters.
• Thirty years ago, South Korea’s preference for sons was 58%, while daughters were 10%.
• Ahn Sook-young (Keimyung University professor) noted, “This may stem from the gendering of caregiving.” Among families caring for dementia patients, 82% were women—42% daughters and 15% sons. “As daughters increasingly inherit caregiving responsibilities traditionally handled by daughters-in-law, it reflects expectations of a ‘caregiving baton pass,’” she explained, attributing the trend to “the lack of societal caregiving infrastructure.”
• Related Link.

90mm of Rain in Gangneung.

• Obbong Reservoir’s water level rose to 16%, and restricted water supply extended from 2 to 6 hours.
• On the 14th, the total water supply was 37,875 tons, of which 6,909 tons were delivered via tankers.
• The reservoir’s average water level is 72%. Though rain fell after 60 days, analysis suggests at least 200mm more is needed to fully resolve the drought.
• Related Link.

Private Education Hub Becomes High-Education Hub.

• As of 2020, the proportion of college-educated parents in Gangnam-gu and Seocho-gu stood at 67% and 63%, respectively.
• In Geumcheon-gu and Jungnang-gu, the figures were 15% and 16%, reflecting a stark gap.
• Choi Eun-young (Korea Urban Research Institute director) analyzed, “The influx of highly educated households into Gangnam has intensified competition by enhancing access to college entrance information and private education,” adding, “This has also deepened disparities in educational environments.”

1.8 Billion KRW Inheritance Tax Exemption to Reduce Revenue by 6.169 Trillion KRW.

• Analysis shows it will exceed 3 trillion KRW over five years.
• At his 100-day press conference, Lee Jae-myung (former Gyeonggi Governor) remarked, “Seoul housing prices have risen significantly, but the exemption threshold was set decades ago,” adding, “It’s cruel to force people to sell their homes and leave because they can’t afford the tax.”
• According to the National Assembly Budget Office, raising the exemption threshold from 1 billion KRW to 1.8 billion KRW would reduce revenue by 3.0843 trillion KRW over five years.

Worth Reading.

What’s Missing in the Prosecutorial Reform Debate.

• Kang Byung-han (Kyunghyang Shinmun political editor) defined prosecutors as a “rent-seeking” profession where “a single exam determines one’s entire life trajectory.”
• Prosecutors are career civil servants, yet a 2nd–4th-grade prosecutor ranks equivalent to a police station chief or army major.
• Grade inflation is rampant: combining level-1 district prosecutors general and vice-ministerial high prosecutors general, there are 40 such positions.
• Residences for officials like the Daegu High Prosecutors’ Office chief span 186 square meters.
• It is also unreasonable that prosecutors’ salaries, tied to the executive branch, are linked to judges’ salaries in the judiciary.
• Kang emphasized, “The status and treatment of prosecutors must be reexamined.”
• Related Link.

Will China Overtake the U.S.?

• Last year, the U.S. and Chinese GDPs stood at $29 trillion and $19 trillion, respectively—a significant gap.
• The U.S. leveraged its reserve currency status to inject liquidity while preserving the dollar’s value and boosting growth. In contrast, China’s dollar-denominated GDP shrank relatively.
• Choi Pil-su (Sejong University professor) noted, “GDP calculation methods overvalue the U.S.” While China applies depreciation to buildings, the U.S. bases its figures on rental values. The U.S. also includes legal services in GDP.
• The share of unearned income from finance, insurance, and real estate is also starkly different: 21% in the U.S. versus 14% in China.
• “Ultimately, whether one country’s GDP is larger than another’s is not the critical question. The more important questions are: Where are new industries born? Who holds core technologies in key sectors? Whose standards are being adopted more widely? GDP size is merely a cumulative indicator of these phenomena. The right questions lead to the right understanding.”
• Related Link.

Winning Without Fighting Is What Matters.

• Beyond its role as a wartime operational body, the Ministry of National Defense also functions as a peacetime institution tasked with preventing war and safeguarding peace.
• The U.S., reflecting on its WWII experience, consolidated its previously presidential-direct-reporting Army and Navy under a unified Department of Defense—an intermediary linking the president and the military. It is widely regarded as a model of civilian control, placing the military under executive oversight.
• Kwon Hyuk-chul (Hankyoreh reporter) remarked, “Trump’s proposal to rename the Department of Defense as the ‘Department of War’ can only be seen as stemming from ignorance and bias.”

The Issue Is Quality Employment.

• Youth employment rates have declined for 16 consecutive months. The employment rate for those in their 60s has caught up to those in their 20s.
• Over five years, the youth population decreased by 1.58 million, yet the number of “resting” youth increased by 150,000—nearing 450,000 as of August.
• The job vacancy ratio stands at 0.44: for every 10 job seekers, only four positions exist. Among workers in their 20s, 43% are non-regular.
• According to the Korea Chamber of Commerce and Industry, 82% of hiring announcements in the first half of this year targeted experienced candidates, while fresh graduate recruitment accounted for less than 3%. The situation is so dire that it’s said, “Even with ‘the highest specs since Dangun,’ it’s hard to enter companies seeking ‘used fresh graduates.’”
• Hwang Bo-yeon (Hankyoreh columnist) emphasized, “The entire nation should be abuzz with debates on creating ‘good’ jobs.”
• Related Link.