South Korea’s Predicament Shows Pain of Trump Trade Deal

South Korea’s predicament illustrates how Donald Trump is reshaping the world among key allies, both geopolitically and financially. The US president is threatening to increase tariffs on goods from South Korea because of what he says is a failure of its lawmakers to codify the trade deal reached last year.

It’s true South Korea’s legislature has struggled to quickly pass a bill related to the agreement. But this is no small task. Back in July, Seoul pledged to invest a total of $350 billion in the US in order to placate Trump. The prospect of such massive outflows has prompted Korean retail investors to pour funds into US stocks and bonds as they worried about spiraling losses in the local currency. This fear has become self-fulfilling, with the won sinking toward levels not seen since the Global Financial Crisis in 2007-2009 or the Asian collapse a decade earlier.