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South Korea’s acting president, Choi Sang-mok, expressed hopes for deeper, reciprocal relations with Washington under Donald Trump’s second term as U.S. president. Concerns loom over the impact of Trump’s policies on Asia’s fourth-largest economy, especially regarding tariffs and electric vehicles.
Choi, also South Korea's finance minister, emphasized the importance of the Korea-U.S. alliance, stating the government’s commitment to strengthening policy cooperation and shared interests. He plans to seek a call with Trump soon, following Trump’s inauguration as the 47th U.S. president.
South Korea faces diplomatic challenges amid domestic political turmoil after the impeachment of Prime Minister Han Duck-soo and President Yoon Suk Yeol. Trump has yet to contact Choi, although he held a brief call with Yoon after his election victory.
South Korea’s $55.7 billion trade surplus with the U.S. in 2024, up 25.4% from the previous year, raises concerns about potential trade restrictions. Trump has signaled intentions to revisit defense cost-sharing agreements for the 28,500 U.S. troops stationed in South Korea, despite a prior five-year deal.
Market reactions were swift, with the KOSPI index falling after Trump proposed 25% tariffs on imports from Canada and Mexico. South Korean battery makers like LG Energy Solution saw significant losses following the revocation of electric vehicle subsidies. However, shipbuilding stocks surged as Trump hinted at potential cooperation in the sector.
South Korea sent Ambassador Cho Hyun-dong to Trump’s inauguration, though domestic instability limited broader representation. Analysts suggest South Korea must address diplomatic disadvantages compared to China and Japan, which sent high-ranking officials.
Choi reaffirmed South Korea’s readiness to navigate economic challenges and uphold the alliance’s principle of “We Go Together.”
