Analysis: South Korea as an early target for Trump
South Korea represents low-hanging fruit for Trump to demonstrate his strength on foreign policy and achieve quick wins in his presidential term.
Event or Trend: Donald Trump's election victory has reignited concerns in South Korea over his approach to alliances. These concerns stem from his criticisms of South Korea's defense cost-sharing contributions and his claim that South Korea is a "money machine". Recent developments suggest South Korea could become an early focal point for Trump's foreign policy strategy.
Significance: South Korea plays a pivotal role in the U.S. security strategy in East Asia, serving as a critical ally in countering North Korea and balancing China's influence in the region. Trump's past rhetoric and policies toward South Korea highlight a transactional view of alliances, where financial contributions often outweigh traditional strategic considerations. This makes South Korea particularly vulnerable to renewed scrutiny. Understanding this dynamic is crucial for policymakers, international businesses, and stakeholders reliant on stable U.S.-South Korea relations. Renewed tensions could disrupt regional security, impact bilateral trade, and strain diplomatic ties, creating ripple effects across global markets and geopolitical landscapes.
Analysis: During his first term, Donald Trump frequently criticized South Korea for not contributing sufficiently to its own defense. His administration demanded a significant increase in South Korea's financial contributions under the Special Measures Agreement (SMA), which governs U.S. troop costs on the peninsula. Trump’s transactional approach strained U.S.-South Korea relations, with negotiations nearly collapsing in 2020.
During the election campaign his rhetoric continued to emphasize the need for allies to shoulder more of the financial burden for defense, signaling potential challenges for South Korea.
South Korea’s decision to renegotiate the SMA on 4 November 2024, immediately before the election, will be viewed as an affront to Donald Trump. It essentially taunts the incoming president with the unbacked claim that he cannot increase South Korea’s payment.
The deal allows South Korea to pay 1.52 trillion won (US$1.19 billion) from 2026, up 8.3 percent from 1.4 trillion won in 2025 with increases linked to the consumer price index as opposed to defense budget until 2030. It effectively reduces the higher payments made under Trump’s first administration. The visuals of signing the deal immediately before the election are not ideal and will appear as an affront.
South Korea represents low-hanging fruit for Trump to demonstrate his strength on foreign policy and achieve quick wins in his presidential administration.
South Korea does not have the backing of a community like European Union or NATO member states, and does not have the same degree of influence and cultural affinity as AUKUS members Australia and the United Kingdom. The EU, NATO and AUKUS members currently face uncertainities and remain concerned regarding Trump’s previous statements and his plans for a second term. South Korea has reasons to be more concerned.
Trump’s prior demands for increased defense contributions from Seoul suggest that South Korea will once again face substantial pressure. Demands to again renegotiate the SMA will exacerbate tensions and the Yoon Administration will resist.
Economically, Trump’s policies will also impact South Korea’s industries. The Trump Administration previously imposed tariffs on South Korean products, particularly in the steel and automotive sectors. A renewed focus on trade imbalances could revive protectionist measures, disrupting supply chains and affecting businesses on both sides. Public sentiment in South Korea could also deteriorate, as Trump’s rhetoric and demands are likely to provoke criticism and resentment among the South Korean public.
The focus on South Korea might stem from broader efforts to showcase Trump's strength in dealing with allies, rather than specific grievances against Seoul. Alternatively, his administration could prioritize other allies, such as Japan or NATO countries, depending on the political and strategic calculus, and influence of senior advisors.
The resurgence of Trump’s rhetoric on alliances signals a potential shift in U.S.-South Korea relations. Diplomats should closely monitor public statements targeting South Korea’s SMA payment and trade policies. South Korea’s responses, both politically and in public opinion, will also be key indicators of the trajectory of the relationship.
Outlook: In the short term (0-12 months), South Korea is likely to face increased demands for higher defense contributions and possible renegotiations of the SMA. Over the medium term (1-5 years), these pressures could lead to a reevaluation of U.S.-South Korea alliance dynamics, with South Korea potentially seeking closer ties with other regional powers. In the long term (5-10 years), the alliance could undergo significant restructuring, impacting both regional security and economic relationships.