Trump's Second Term Strains the US-South Korea Alliance

President Donald Trump's directive to reduce the scale of joint military exercises with South Korea has brought back a familiar point of friction in the bilateral relationship. The move, echoing a decision from his first term, highlights how his transactional approach continues to challenge an alliance that has lasted over seven decades.

Trump's North Korea policy has been a central factor. After early threats of "fire and fury," he met Kim Jong Un in Singapore, Hanoi, and at the Demilitarized Zone. Following the first summit, he suspended a major joint exercise, calling it costly and provocative. Subsequent drills were cancelled or redesigned. However, after talks in Hanoi collapsed, North Korea expanded its weapons programmes, and the allies restored larger exercises that now include responses to drone and cyber threats. Today, with North Korea's arsenal further advanced and its military ties with Russia deepened, Trump's latest order revives his old approach under new conditions. He maintains his personal relationship with Kim remains positive.

The US security commitment is also under scrutiny. Trump has repeatedly questioned the cost of the roughly 28,500 US troops stationed in South Korea. His administration is pushing to "modernise" the alliance, potentially allowing US forces more flexibility to address challenges beyond the peninsula, particularly from China. This creates a dilemma for Seoul, which relies on Washington for deterrence but is wary of being pulled into a conflict over Taiwan. Negotiations have yielded some progress for South Korea, including US endorsement of its pursuit of nuclear-powered submarines. Seoul also seeks more latitude on nuclear fuel enrichment and a faster transfer of wartime operational control.

Burden-sharing remains a contentious issue. Trump's first-term demands for a sharp increase in Seoul's financial contribution raised fears of a troop reduction. A new cost-sharing agreement for 2026-2030 is in place, with Seoul contributing about 1.52 trillion won ($1.1 billion) this year. Despite this, Trump continues to argue South Korea pays too little, while Seoul insists the existing deal should be honoured.

Trade relations have also evolved. Trump's first administration renegotiated a free trade agreement and imposed steel tariffs. His second term has brought broader tariff pressure, with a 15% rate agreed upon after initial threats of 25%. Trump has since threatened higher tariffs again, accusing Seoul of slow implementation. US scrutiny of South Korean regulation of American tech companies, including e-commerce firm Coupang, has become a further irritant.

Investment has become a key focus. South Korean companies have pledged significant investment in US industries, and Seoul promised $350 billion for US projects in exchange for tariff relief. A disagreement emerged over whether this sum would be paid upfront or through loans and equity. The detention of hundreds of South Korean workers during a 2025 immigration raid at a battery project in Georgia has also raised alarm and prompted warnings that companies might reconsider US projects.

Political management has shifted with changing governments. Trump's terms have largely overlapped with liberal South Korean administrations favouring engagement with the North. The conservative government of Yoon Suk Yeol took a hard line, but the current liberal government under Lee Jae Myung again favours lowering tensions. Seoul has cultivated direct channels to the White House, and the appointment of Seoul-born former congresswoman Michelle Steel as US ambassador provides a politically aligned envoy for navigating these complex issues.