President Donald Trump aired fresh grievances about South Korea and hinted at trade retaliation, 15 days after he disclosed details of his phone call with President Lee Jae-myung.
In a Fox News interview released on the 30th, Trump said the United States spends billions of dollars to help the North Atlantic Treaty Organization and other countries but receives little in return, citing South Korea as an example. He raised the country unprompted, even though the question had not been about Korea.
Trump also voiced frustration over U.S. troops stationed in South Korea, saying the United States keeps 40,000 troops there and that Seoul responded to a request for help on Iran by saying it would rather not. About 28,500 U.S. troops are stationed in South Korea, a figure Trump has repeatedly inflated to about 40,000.
The United States has been helping South Korea, Trump said, but the response was different when Washington asked for help. He said he had not pressed hard and had only asked whether Seoul would join, and that it declined. He added that he made a mental note to remember the episode.
Trump went further, suggesting trade retaliation. He said the United States stands to make a lot of money going forward, because it cannot be the one that keeps helping when the other side is unwilling to help in return.
Separately, Treasury Secretary Scott Bessent urged Group of 20 members on the same day to reconsider their terms of trade with China.
Speaking to Reuters ahead of the G20 finance ministers' meeting, Bessent said the world cannot absorb a China that runs a $1.2 trillion trade surplus, and that it is time for the rest of the world to review its trade terms with the country.
Bessent also said the yen's weakness was fairly well contained. On whether the Bank of Japan will raise rates further, he said he expects Governor Kazuo Ueda to make the appropriate decision. He said he would not dictate policy to Japan, but added that Tokyo should seriously consider that Abenomics, a monetary reflation program, has run its course. Bessent is scheduled to meet Ueda separately on the sidelines of the G20 meeting.
Japanese financial markets, however, have been unsettled, contrary to Bessent's assessment. The yen has weakened past 160 to the dollar, while market interest rates have climbed amid concerns over further tightening and fiscal strains.
The yield on Japan's 10-year government bond rose to 2.950% in Tokyo trading on the 31st, according to the Nikkei, the highest level in about 30 years, since September 1996. Rising yields mean falling bond prices.
Analysts attribute the increase to expectations that the weak yen could push the Bank of Japan to raise its policy rate faster, amid continued upward pressure on global rates. Markets put the odds of a September rate increase at about 80%. The Nikkei said caution is spreading in the bond market that yields could rise further, and that the 10-year yield could top 3% if government bond auctions fail to draw sufficient investor demand.
