US President Donald Trump’s sweeping tariff deals in Asia are showing signs of unraveling, with South Korea and Japan both pushing back against his massive financial demands while China avoids entering into any agreement altogether.
In Seoul, President Lee Jae-myung rejected Trump’s call for a US$350 billion “signing bonus,” an amount equal to nearly one-fifth of Korea’s economy. Lee warned that paying such a sum upfront would risk triggering a crisis similar to the 1997 financial meltdown. Korea’s National Security Adviser Wi Sung-lac confirmed that the demand is simply impossible to meet, amounting to more than 70% of this year’s budget and about 80% of the country’s foreign reserves.
Japan is also reconsidering its deal, which requires a $550 billion transfer. Senior lawmaker Sanae Takaichi, a top contender for the premiership, suggested a renegotiation if the arrangement proves harmful to Japan’s interests. Tokyo’s chief trade negotiator, Ryosei Akazawa, attempted to downplay risks to the yen, but admitted that the package would be financed gradually through loans and investments rather than an immediate cash payout, a plan unlikely to satisfy Trump.
In Europe, Trump has asked the EU for $1.35 trillion in commitments by 2028, including huge purchases of American energy and fresh investments. Analysts have dismissed these figures as wildly unrealistic, though EU leaders have expressed willingness to boost US energy imports to diversify away from Russian supplies.
Critics say Trump’s approach risks backfiring. Veteran economist Anne Krueger described the policy as “puzzling” and warned it could hurt the US more than its trading partners. She noted that demanding massive foreign investments could actually increase America’s current account deficit, contradicting Trump’s stated goals.
In South Korea, anger has been heightened by the detention of hundreds of local workers at a Hyundai-LG battery plant in Georgia, adding to fears of growing instability under Trump’s trade regime.
Observers argue that Trump’s strategy reflects a transactional view of alliances. Georgetown University’s Victor Cha said the US now sees allies as costly obligations rather than strategic assets, preferring to demand financial concessions instead of strengthening long-term partnerships.
Legal challenges also loom. Lower US courts have already ruled parts of Trump’s tariff policies unconstitutional, and if the Supreme Court upholds those rulings, refunds of collected tariffs could disrupt financial markets. Yet some analysts warn that Trump might sidestep such rulings by invoking other tariff powers, keeping uncertainty alive.
Meanwhile, China has avoided making any commitments, instead biding its time as Trump’s demands strain relations with other allies. Beijing has diversified its trade toward Europe, Southeast Asia, and the Global South, strengthening its position. Reports suggest Chinese leader Xi Jinping believes Trump’s growing need for a “grand bargain” may eventually push Washington into concessions, possibly even on sensitive issues like Taiwan.
With South Korea unable to pay, Japan seeking renegotiation, and Europe balking at Trump’s trillion-dollar demands, his trade diplomacy in Asia and beyond risks collapse. For China, the turmoil only validates its wait-and-see approach as Trump’s high-cost deals face mounting resistance.
Trump fails in trade decisions in Asia
