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Monday, February 24, 2025

Trump’s Return Brings New Uncertainty for South Korea’s U.S. Investments

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Yonhap News
Photo courtesy of KITA / Yonhap News

With U.S. President Donald Trump prioritizing Pacific policies, there are concerns that South Korea could be sidelined if he engages in direct talks with North Korea. Some analysts suggest that the situation could unfold similarly to the ongoing U.S.-Russia ceasefire negotiations, where Ukraine—the country directly involved in the war—has been excluded.

On Wednesday, former U.S. Ambassador to South Korea Kathleen Stephens appeared on a podcast hosted by Victor Cha, Korea Chair at the Center for Strategic and International Studies (CSIS), a U.S. think tank. She responded with this analysis when asked how South Korea perceives the ceasefire talks between the U.S. and Russia in Saudi Arabia that excluded Ukraine. Stephens noted that South Korea is likely to believe that Trump may also downplay relations with the Atlantic region (Europe) in the U.S. and Asia. She explained that this is because Trump is expected to focus on the Pacific. She added that she is certain there is a significant concern in South Korea about the possibility of Seoul passing (being bypassed in key diplomatic decisions). She further pointed out that, just as Trump engaged in direct talks with North Korean leader Kim Jong Un during his first term, he will likely do so again. Similarly, since Ukraine was not included in the recent U.S.-Russia high-level talks, concerns are growing that South Korea might also be left out of a potential North Korea-U.S. summit despite being a key stakeholder in regional security threats.

Stephens emphasized that whether South Korea is bypassed in diplomatic affairs depends on the officials managing U.S. Asia policy, the relationship between Trump and South Korea’s president, and how that relationship develops. She noted that bipartisan support for alliances in the U.S. has deepened for decades, and she hopes that this institutional framework will help withstand the unconventional stresses and tensions of Trump-style diplomacy.

Additionally, Stephens highlighted tariffs as one of the most urgent issues South Korea faces following the launch of Trump’s second administration. She cited the 25% tariff on foreign steel, including South Korean steel, as an example. She also pointed to South Korea’s large-scale investments in the U.S. under laws enacted during the previous Biden administration, such as the Inflation Reduction Act (IRA) and the CHIPS Act. She stated that it remains to be seen how the Trump administration will decide to implement these laws and other legislative initiatives.

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