Seoul: The United States has reportedly asked South Korea to spearhead a multi-billion-dollar 'manufacturing cooperation enhancement fund' as part of the ongoing tariff negotiations between the two countries. This development was revealed through a media report on Wednesday.

According to Anadolu Agency, the proposed fund aims to strengthen American manufacturing by providing financial support to South Korean firms willing to build or expand factories in the U.S. or invest in local partners. The report cited unnamed South Korean government officials in Seoul as its source. However, neither Seoul nor Washington has officially confirmed the report's details.

In the backdrop of these negotiations, the Trump administration had previously requested South Korea to ease trade barriers in sectors such as agriculture and digital data. The concept of the fund was noted to be akin to a proposal from Japan, which suggested the establishment of a sovereign-style fund to support American industry. Japan reportedly proposed a $400-billion fund during its trade discussions with the U.S., which have yet to reach a consensus.

The current tariff discussions are a result of new levies announced by U.S. President Donald Trump, which could impose up to 25% tariffs on imports from South Korea if an agreement is not reached by August 1. Additionally, a 50% tariff has been placed on copper imports, a significant export for South Korea. Last year, the bilateral trade volume between the U.S. and South Korea was around $197 billion, with the U.S. trade deficit with Seoul standing at $66 billion.

The report further detailed that U.S. officials have raised the demand for the fund twice earlier in the month. Negotiations are currently being led by Yeo Han-koo for South Korea, who has engaged in discussions with U.S. Commerce Secretary Howard Lutnick. South Korea has proposed opening its agricultural markets and relaxing digital map export restrictions, while the U.S. shows interest in the proposed fund.

As the August 1 deadline looms, South Korea's chief trade negotiator Yeo stressed the importance of prioritizing national interest over speed, stating, "We are not going to sacrifice substance for speed." He further emphasized that rushing to meet deadlines at the cost of national interest is not an option.