(News Focus) Lee faces tariffs, burden-sharing, other headwinds for S. Korea-U.S. alliance

With little time to bask in his triumph, South Korean President-elect Lee Jae-myung faces the daunting task of reinforcing the Seoul-Washington alliance amid President Donald Trump’s calls for “reciprocal” trade, greater defense burden-sharing and alignment on deterring China.

Wading into the rough waters of geopolitics, Lee is bound to navigate multiple headwinds for the alliance at a time when South Korea’s place in Trump’s policy agenda has appeared shaky in the wake of ousted former President Yoon Suk Yeol’s martial law debacle in December.

His embrace of a “pragmatic” foreign policy that values the alliance as its “foundation” has raised cautious optimism, but Trump’s unabated tariff pressure, a hardening Sino-U.S. rivalry, a potential U.S. troop cut and other nettlesome issues continue to fuel uncertainties over the bilateral relations.

“Both the Lee and Trump administrations will need to remain pragmatic on core security and economic issues to sustain a durable alliance,” Patrick Cronin, the chair for Asia-Pacific security at the Washington-based Hudson Institute, told Yonhap News Agency via email.

“Friction and instability are inevitable, but deft and substantive deal-making will be essential to provide the ballast needed to keep the alliance steady — so it doesn’t capsize like a poorly built North Korean destroyer,” he added, referring to a warship that the North said was damaged during its launch ceremony last month.

For Lee, the most pressing task at hand is to reach a wide-ranging deal with Washington over U.S. tariffs, non-tariff barriers, and economic and industrial cooperation before July 8, when Trump’s 90-day suspension of “reciprocal” tariffs ends.

In April, the Trump administration announced 25 percent reciprocal tariffs on South Korea, putting the Asian ally on the list of the “worst offenders.” Reciprocal tariffs took effect on April 9, but Trump placed the three-month pause shortly afterward to allow for negotiations.

Lee’s administration is now charged with avoiding or minimizing the impact of not only the reciprocal tariffs but also various sectoral tariffs, including 25 percent levies on imported steel and aluminum, which Trump plans to double to 50 percent, starting Wednesday.

For Asia’s fourth-largest economy heavily reliant on trade, new U.S. tariffs have been a serious source of economic concerns. New U.S. tariffs had been much expected to hit South Korea, with U.S. data putting last year’s goods trade deficit with Korea at US$66 billion.

Tariffs aside, non-tariff barriers have been a key part of the bilateral negotiations. The U.S. Trade Representative has taken issue with Korea’s restrictions on imports of U.S. beef from cattle aged 30 months or older and living modified organisms, and overseas transfer of high-precision map data.

“The most immediate challenge is negotiating a trade deal with the U.S. The outcome of the trade deal as well as discussions on alliance burden-sharing will likely set an early tone for U.S.-South Korea relations under Lee,” Andrew Yeo, the SK-Korea Foundation chair at the Brookings Institution’s Center for East Asia Policy Studies, told Yonhap News Agency.

“If both Trump and Lee can claim a win on the trade front, the new South Korean president will have more room to breathe in managing other issues pertinent to the alliance. On the other hand, U.S. unilateral demands or the unwillingness to offer concessions may push Lee to tilt further towards China.”

Finding an optimal policy approach toward China that does not strain ties with the U.S. would be a tough challenge for Lee, when the Trump administration wants its Indo-Pacific allies and partners to coalesce around its efforts to deter Chinese aggression.

On the campaign trail, Lee vowed to “stably” manage the relationship with China under his leitmotif of pragmatism, which Yeo said demonstrated an openness to engage with countries with “more adversarial relations with the U.S.,” such as China, North Korea and Russia.

“Another key challenge is potential differences in Seoul and Washington’s perspective on China and the role the alliance might play in deterring Chinese aggression, including on the Taiwan Strait,” Yeo said.

“Close ties between Seoul and Beijing would be problematic for the Trump administration which is asking its allies in Asia to increase defense spending to strengthen deterrence against China.”

Bruce Bennett, a senior defense analyst at RAND Corp., noted the need for Lee to take a cautious approach toward China to ensure that South Korea would not be needlessly perceived as “contrary to U.S. interests” when the U.S. sees China as its principal adversary.

“I point to the need for Lee to be careful in drawing too close to China and thereby alienating the Trump administration. Lee has five years to build a relationship with China, and so I recommend that he proceed slowly,” Bennett said. “The Trump administration also undoubtedly recognizes Lee’s progressive tendencies and how they may conflict with the Trump administration’s political philosophy.”

Another brewing issue for the allies is the possibility of a U.S. Forces Korea (USFK) troop drawdown, a topic that resurfaced following a recent Wall Street Journal report that the Pentagon is considering withdrawing about 4,500 troops of the 28,500-strong USFK and moving them to Guam and other locations.

Chief Pentagon spokesperson Sean Parnell has dismissed the report as “not true,” but a senior U.S. official pointed out the need last week to “calibrate” U.S. force posture on the Korean Peninsula to deter China, leaving open the possibility of an adjustment to the USFK troop level.

The report came amid a reignited debate over the issue of “strategic flexibility” — a term referring to the use of USFK troops to address China-related contingencies or other operations outside the Korean Peninsula in a move away from their traditional focus on deterring North Korea.

“The Trump administration should acknowledge Seoul’s concerns regarding political sensitivities related to strategic flexibility and its implications for ROK-China relations,” Yeo said. ROK is short for South Korea’s official name, the Republic of Korea.

“To address this concern, Seoul and Washington might frame strategic flexibility and the expanded role of the U.S.-ROK alliance as a response to shifts in the broader geopolitical environment, such as China-Russia-North Korea-Iran linkages rather than just a China problem,” he added.

Trump’s drive for an increase in allies’ defense spending would likely figure prominently when the Lee administration starts high-level engagement with Washington, observers said.

Trump has said that South Korea has not sufficiently “reimbursed” America for its “big-time” protection of the Asian ally, a narrative that reinforced speculation that he might call for a rise in Seoul’s share of the cost for stationing the USFK.

During his speech at an annual defense forum in Singapore last week, Defense Secretary Pete Hegseth made clear that the U.S. wants Asian allies to jack up their defense spending.

“It is hard to believe a little bit, after some trips to Europe that I am saying this, but thanks to President Trump, Asian allies should look to countries in Europe as a newfound example. NATO members are pledging to spend 5 percent of their GDP on defense, even Germany,” he said. GDP is short for gross domestic product.

“It doesn’t make sense for countries in Europe to do that, while key allies and partners in Asia spend less on defense in the face of an even more formidable threat, not to mention North Korea.”

His remarks appeared to mark a subtle shift from Trump’s focus on some members of the North Atlantic Treaty Organization (NATO) that the president once called “delinquent.”

“Washington’s push for greater burden-sharing — and expectations that wealthy allies assume a larger share of defense costs — will likely trigger speculation about U.S. troop withdrawals and even independent nuclear options,” Cronin said.

“While such tensions may cause initial anxiety, I expect both governments to find practical ways to modernize the alliance while simultaneously investing in their respective national defense capabilities.”

Bennett anticipated that Trump will want to see South Korea’s plan to raise its defense budget at least up to 3 percent of its GDP.

“The Trump administration will undoubtedly know that a decade or so ago South Korea promised to bring its defense budget up to 3 percent of its GDP and yet has never risen it to much above 2.5 percent,” he said.

Another key task for the alliance is policy coordination over North Korea diplomacy at a time when Pyongyang appears to have little appetite for engagement with either Washington or Seoul amid its deepening alignment with Moscow.

Trump has repeatedly expressed his openness to resuming dialogue with North Korean leader Kim Jong-un, while Lee has voiced hope for renewed cross-border engagement, tension reduction and trust-building with Pyongyang.

“But neither will sacrifice national security to achieve it. Real concessions from Kim Jong-un will be necessary to move beyond symbolic gestures,” Cronin said.

Cronin stressed the need for reliable and secure communication channels between the allies for policy coordination.

“Ideally, I would like to see decision-makers in Seoul and Washington operate with the cohesion of the Combined Forces Command — like a data center with ‘five nines’ of uptime: fewer than five minutes of disconnect per year,” he said. The command is a unified unit of South Korean and U.S. forces headquartered in South Korea.

Bennett proposed that Lee and Trump take a “carrot and stick” approach toward the North.

“If Kim closes his new uranium enrichment plant and subjects it to IAEA monitoring, the U.S. and South Korea will work together to reduce some specific sanctions against North Korea (the carrot),” Bennett said. IAEA refers to the International Atomic Energy Agency.

“But if Kim fails to take this action, the U.S. and South Korea will modernize nuclear weapon storage that exists in South Korea (and has not been used since 1991) as well as build some new nuclear weapons storage facilities (the stick).”