Korea - US Relations
After Trump was elected in November 2024, Yoon Seok-yeol immediately sent his congratulations, posting: "Under your strong leadership, the future of the ROK-US alliance and the United States will be even brighter. I look forward to working closely with you." Among all the congratulations, it has to be said that South Korea's flattery skills are first-rate. But Trump had called South Korea a "money-making machine" and threatened to make South Korea bear 10 times the current defense cost sharing, that is, 10 billion US dollars (about 14 trillion won) per year. In the end, the white middle-class workers who madke up the majority of American society responded to Trump's slogan of "Make America Great Again."
South Korean President Yoon Seok-yeol ordered the formation of a working committee led by Deputy Prime Minister Choi Sang-moo to prepare for changes in U.S. economic and foreign policy during a second term of Donald Trump's presidency. The South Korean president said: "(Preparations) should not be carried out after the (U.S.) new government starts work. You should immediately launch working committees in the three major areas of finance, trade and industry, headed by the deputy prime minister in charge of economic affairs."
Yoon Seok-yeol said 10 November 2024 at the Economic and Security Conference "In light of changes in the external environment" that the change in Washington's political course after Donald Trump took office will bring "many changes to the global economy and security." He mentioned that he had agreed to hold talks with the US president-elect to "build friendly relations" and ordered the government to support and maintain close contact with companies whose competitiveness may be affected by new US measures. Yoon noted that there could also be "a lot of structural changes" in the defense and security sectors under Trump's presidency, and he urged members of the administration to ensure that "confident deterrence" against North Korea is maintained through the military alliance with the United States.
Officials in Seoul spent months preparing for the possibility that Trump could be elected president, a victory that would put the trade-dependent nation at greater risk. One key area under scrutiny is South Korea’s growing trade surplus with the United States. If the trade imbalance becomes a sticking point for the Trump White House, the South Korean government may urge companies to increase purchases of U.S. oil and gas, according to people familiar with the matter. Other countries with large trade surpluses with the United States include China and Mexico. Policymakers around the world tried to figure out what a potential second term for Trump would mean for Washington's foreign policy, especially given his vow to impose a minimum 10% tariff on all imports and raise tariffs on Chinese goods to 60%.
South Korea is a major player in semiconductor manufacturing, so its cooperation is important to U.S. export control efforts against China. At the same time, South Korea relies on the presence of U.S. troops to deter North Korea, which is strengthening ties with Russia and sending troops to support Moscow's war of aggression in Ukraine. South Korean President Yoon Seok-yeol has been busy practicing golf recently, preparing to play golf with Trump to get close to him, just like Abe did in the past; the South Korean Ministry of Foreign Affairs was even more straightforward, and a directly released a picture with the theme: South Korea is very important to the United States.
Seoul officials met with businesses and think tanks to discuss post-election strategy. South Korea was eager to find ways to increase energy purchases from the United States when Trump last came to power. The South Korean government could approach major oil importers and ask them to increase their share of U.S. purchases, although that doesn’t always lead to the expected increase, the people said. This time around, geopolitical risks in the Middle East could provide an extra impetus for companies to turn to U.S. imports.
South Korea, which relies heavily on imports for nearly all of its energy needs and has one of the world’s largest clusters of refineries, has imported about 11% of its natural gas and 17% of its oil so far this year from the United States. South Korea’s SK Innovation and GS Caltex are among the largest importers. South Korea’s Ministry of Trade, Industry and Energy declined to comment on the government’s plans. SK Innovation and GS Caltex also declined to comment.
Son Sungchul, head of strategic operations at SK Energy, South Korea’s largest refiner, said on an earnings call on 04 November 2024y that SK Energy was diversifying its crude oil shipments due to geopolitical risks in the Middle East, with U.S. and Canadian oil being slightly more profitable. U.S. crude accounts for 20%-30% of its total imports, he said. Just before Trump took office in 2017, South Korea’s Ministry of Trade, Industry and Energy urged the country’s refiners to diversify their crude oil purchases, saying it was necessary to improve energy security and stabilize prices. South Korean officials are now working with business leaders to convince U.S. policymakers and Congress that South Korean companies have been investing and hiring more in the United States over the past few years and will continue to do so, the people said.
Doo Jin-ho, a research fellow at the Korea Institute for Defense Analyses, said 20 November 2024 South Korea is becoming more cautious about providing arms to Ukraine, especially after Trump’s reelection. “While it’s important to align with the Biden administration, if South Korea provides military support to Ukraine while Trump is signaling a reduction in aid, it will inevitably affect the South Korea-U.S. alliance in the coming months,” Doo said, noting that Trump and Russian President Vladimir Putin may have already begun behind-the-scenes negotiations for a peace agreement.
If the Trump administration still only cared about its own national interests and put extreme pressure on South Korea, South Korea could fall into a dilemma of being "besieged on all sides". Although it is reluctant to think about it, Trump may demand the abolition of the "Special Agreement on Defense Cost Sharing between South Korea and the United States" (SMA) reached at the beginning of last month, and even threaten to "withdraw US troops from South Korea" or turn the "Washington Declaration" that the Yoon Seok-yeol administration is proud of into a dead letter.
South Korea's ruling party proposed a bill in November 2024 to provide subsidies to South Korean chip manufacturers and lower working hours requirements to counter the impact of possible tariffs that Trump may take on the South Korean chip industry. This is because high tariffs imposed by the United States on Chinese imports may prompt Chinese chip manufacturers to cut prices, weakening the overseas competitiveness of Korean chip companies. “Whether it is an ally or a competitor…these key technologies have become a focus of economic strength as well as a consideration of national security…South Korea also needs to continue to build up its domestic production and innovation base while trying to find a delicate balance between these geopolitical rivals,” Yeo Han-koo, former South Korean trade minister and senior fellow at the Peterson Institute for International Economics (PIIE) said. In addition, South Korean semiconductor back-end process company Hana Micron and American semiconductor packaging and testing giant Amkor are also accelerating the process of "de-Sinicization".
|
NEWSLETTER
|
| Join the GlobalSecurity.org mailing list |
|
|
|
