After several months of grueling negotiations, South Korea finally reached a trade agreement with the United States. On July 30, US President Donald Trump announced that Washington will charge a 15% tariff on imports from Seoul, bringing the rate down from an earlier threatened 25%.
While a written agreement is yet to be concluded, the initial details of the terms state that South Korea would invest US$350 billion in “US projects”, including $200 billion in strategic industries such as semiconductors and $150 billion in a shipbuilding partnership.
Furthermore, according to US Commerce Secretary Howard Lutnick, Seoul will make $100 billion worth of energy purchases over the next 3.5 years, including “LNG, LPG, crude oil and a small amount of coal.”
South Korea’s route to a favorable agreement has been fraught with challenges. A lack of clarity in the tariff regime and the Trump administration’s increasingly transactional approach to diplomacy made it difficult for Seoul to chalk out a predictable course to trade negotiations.
Moreover, rather than prioritizing consistent trade terms for allies, the United States has focused on maintaining conditionality in tariff relief on various economic and strategic concessions ranging from the removal of trade barriers to increased purchases of US-made goods.
South Korean officials have, thus far, navigated a complicated and ambiguous negotiation landscape. Due to the deal’s unresolved terms, there are concerns in Seoul that Washington might seek to leverage security commitments, including its extended deterrence, as a bargaining chip for extracting further concessions.
That could potentially leave South Korea to weigh economic cooperation against broader strategic compliance. The tumultuous nature of trade negotiations marks a broader trend in the US-ROK alliance, where tariff talks have emerged as a symptom of a more profound unease.
Since assuming power for a second term, US President Donald Trump has stressed dealing with “reciprocity” in relations with allies and adversaries alike. Trump has unilaterally prioritized US interests, radically departing from Biden-era policies, which emphasized collaboration with allies.
South Korea is firmly on Trump’s transactional diplomacy radar. Trump has made comments indicating greater defense cost-sharing with Seoul and a potential withdrawal of US troops from the Korean peninsula.
He also previously stated that Washington’s security commitments in the region would be a major part of tariff negotiations. Trump has effectively attempted to merge the security and economic realms, hinting that a failure to secure economic terms would likely lead to a grave weakening of security guarantees. The tariff deal with South Korea is reflective of Trump’s transactional playbook.
For Seoul, this development raises a sobering reality. Under the Trump administration, diplomacy with Washington has become a ledger of obligations rather than a trust-based partnership.
The unpredictability of Trump’s foreign policy, frequent threats of reducing the US military deployment in Korea and the conditional nature of cooperation have all contributed to a growing trust deficit. This, in turn, has caused an erosion of confidence in the reliability of the alliance.
South Korea’s concerns are further exacerbated by shifting regional dynamics. With North Korea bolstering its nuclear program and China’s ever-growing economic assertiveness, South Korea finds itself in an increasingly precarious position.
Moreover, Seoul feels pressure from the trilateral alliance with the US and Japan. While the Camp David Summit in 2023 ushered in a new era of cooperation between the nations, it has also placed Seoul in a sensitive diplomatic position with little maneuverability.
While a closer security partnership with Washington and Tokyo helps deter regional threats, it also risks antagonizing Beijing, Seoul’s leading trade partner and a key player in maintaining regional stability.
This combined strain complicates Seoul’s strategic calculation, requiring it to choose between strengthening security ties, maintaining key economic relations and establishing strategic autonomy.
Faced with a rapidly changing regional dynamic and an increasingly unpredictable ally, South Korea cannot afford to view the US-ROK alliance as it has in the past. Alliances have moved away from being forged in historical narratives and ideological affinities, and the Trump administration’s transactional nature is representative of this shift.
While it would be ill-advised to undermine the alliance, Seoul must adopt an interest-driven approach to foreign policy. Proactive engagement is the need of the hour. The Lee Jae-myung administration needs to engage in consistent pragmatic dialogue with the US. There should be a stress on cooperation, whether within the trilateral framework or bilaterally.
The onus is on Lee as well. He must show an active and constructive intent in upholding the US-ROK relationship. The upcoming US-ROK bilateral meet provides Lee with an opportunity to showcase his willingness for cooperation with Washington.
While engagement with Washington is of utmost priority, Seoul must not be apprehensive of reaching out to Beijing, albeit in a limited capacity. For this purpose, multilateral forums, such as the APEC Summit to be held in South Korea, can serve as potent platforms for agenda setting.
While it is unlikely for Seoul to align with Beijing as a result of Washington’s strong-arming, the strategic option of increased cooperation with China becomes more enticing as Trump continues to push South Korea into a corner.
Trump must realize that pushing the “America first” narrative at the expense of a long-standing and trusted ally is bound to be detrimental to Washington’s interests in the long run. For now, the foundation of the US-ROK relationship under the Trump administration rests on shaky ground. Restoring stability and trust is crucial for the future of the alliance.
Gagan Hitkari is non-resident James A Kelly Korea fellow, Pacific Forum, Hawaii, US and a PhD candidate at the Department of East Asian Studies, University of Delhi in India.
