South Korea's top trade envoy, Yeo Han-koo, is heading to the United States on Monday for follow-up tariff negotiations, the trade ministry said, as the countries struggle to overcome obstacles to finalise a trade deal agreed in July.

Details of the broad trade agreement still need to be hammered out, especially around a $350 billion investment fund.

Officials in Seoul have said talks are being delayed because the terms outlined in a similar trade deal Japan struck with the U.S. are unacceptable for South Korea due to foreign exchange market implications.

Kim Yong-beom, South Korea's top presidential policy adviser, said last week talks were "deadlocked" over foreign exchange issues, flagging concerns over the repercussions to foreign currency reserves from implementing the $350 billion investment package.

The finance ministry said on Sunday that it was discussing various measures with the U.S. to minimise any impact on the onshore currency market from the investment package but declined to confirm if these included a foreign exchange swap line.

Yeo's trip comes after Industry Minister Kim Jung-kwan recently returned from Washington after talks with U.S. Commerce Secretary Howard Lutnick.

"We're working hard to achieve an outcome that is reasonable and meets our national interests," Yeo told reporters at the airport before leaving for the United States. He also reiterated that South Korea did not intend to further open up the agricultural market.

The apparent inability of Industry Minister Kim to make progress in trade talks during his U.S. trip has raised concerns that negotiations have reached an impasse, local media reported.

Kim did not elaborate on the trade negotiations other than saying they were still underway when asked by reporters about his latest U.S. trip.

The trade ministry could not immediately be reached for comment.

Asked about whether the talks were being prolonged, Presidential Spokesperson Kang Yu-jung said on Monday that the government would negotiate with Washington until it reached an outcome that maximised South Korea's national interests, including on foreign currency reserves and the protection of companies.

President Lee Jae Myung said last week that he would not sign any agreement with the U.S. if it put at risk South Korea's national interests.

"If it doesn't benefit us, there's no point in signing it," Lee told a press conference.

Strained relationship

The tariff negotiations are underway at a time when the countries are trying to repair strained ties after a recent U.S. immigration raid where hundreds of Korean workers were arrested at a Hyundai Motor battery plant in the state of Georgia, one of South Korea's biggest U.S. investment projects.

Images of the raid where workers were taken into custody in handcuffs and shackles by U.S. immigration authorities have left many shocked in South Korea, a key U.S. ally.

U.S. President Donald Trump said in a post on social media that he wanted foreign companies to bring their professionals to teach and train Americans to learn how to make complex products such as chips and ships.

"I want them (foreign companies) to bring their people of expertise for a period of time to teach and train our people how to make these very unique and complex products," Trump said on his Truth Social platform.

"I don’t want to frighten off or disincentivize Investment into America by outside Countries or Companies," he said.

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