Trump's transactional approach makes Seoul rethink how to work with Washington

U.S. President Donald Trump is treating alliances less as partnerships built on shared democratic values and more as transactions to be evaluated on price, an approach that has grown more overt in his second term, analysts say. For South Korea, that means falling short in one area could cost it in another, as Washington folds trade, investment and security into a single bargain.

The shift is forcing Seoul to rethink its approach to Washington, with the central question moving from what principles the two allies share to the terms and costs under which the alliance will operate.

“For Trump, an alliance is less a partnership for defending shared values than a kind of 'investment portfolio' whose returns and risks are constantly managed,” said Lee Byong-chul, a professor at Kyungnam University's Institute for Far Eastern Studies.

During his first term, from 2017 to 2021, Trump repeatedly took issue with the cost of stationing U.S. troops in South Korea and of joint military exercises, approaching the alliance largely through the lens of cost. In his second term, that balance-sheet logic has spread beyond defense cost-sharing to trade, tariffs, investment, supply chains, technology and energy. Issues once handled separately are now increasingly bundled together as a single package under Washington's national security strategy.

“Before Trump meets another country's leader, the first item his aides put at the top of the briefing materials is that country's trade surplus with the United States,” a diplomatic source said, citing secondhand information.

The administration “appears to treat economics and security as a single, integrated national strategy,” Hong Kun-sik, an associate research fellow at the Institute for National Security Strategy, wrote in a report analyzing the second Trump administration's reciprocal trade policy and South Korea's response. “The United States is shifting toward strategic reciprocity, in which it provides a security umbrella, market access and cooperation on core technologies in exchange for commensurate economic contributions and responsibilities from its allies.” 

The U.S. conflict with Iran illustrates this view. After months of military confrontation, including U.S. strikes and a naval blockade of Iranian ports near the Strait of Hormuz, the Trump administration has moved to isolate Tehran economically. In an August interview, U.S. Treasury Secretary Scott Bessent warned allies, “You are either with us or against us” regarding Iran sanctions. 

Shared values such as defending democracy and peace, long the chief justification for U.S. foreign policy, have given way to Washington's alliance scorecard approach of charting how much an ally contributes, through action and money, to U.S. strategy. Even core allies that fail to back U.S. demands with concrete action are now more likely to face pressure in other areas.

This transactional approach could also directly affect security on the Korean Peninsula if talks between Washington and Pyongyang resume. In chasing another summit with North Korean leader Kim Jong-un, the Trump administration could turn South Korea-U.S. combined exercises, which the North has long demanded be scaled back or halted, or the role and size of U.S. Forces Korea into bargaining chips.

Trump has already shown he is willing to make such a trade. In August, he posted on social media that he had ordered the annual Ulchi Freedom Shield combined exercises with South Korea scaled back, signaling his openness to talks with the North. The drills, originally scheduled to run 11 days, ended after just five.

He did the same in 2018, abruptly announcing a halt to joint drills after the Singapore summit with Kim and citing their cost. Analysts say that labeling the drills costly and hostile to the North, even as Pyongyang's nuclear and missile capabilities advance, departs from the alliance's established logic.

Experts are particularly watching whether “cross-transactions,” in which failing to meet U.S. demands in one area triggers demands for concessions in an entirely different one, become the new norm in the alliance. If South Korea's investments in the United States are delayed, for example, Seoul could face pressure in security negotiations. If South Korea responds tepidly to U.S. requests for cooperation in the Middle East or other regions, combined exercises or Washington's defense commitments could in turn be affected by the issue.

“This pattern of continually reassessing and adjusting the actual benefits each ally provides to the United States and the costs it bears will continue for the time being,” Prof. Lee said. 

As a result, the central question in Seoul's diplomacy with Washington is shifting from what values the two countries share to the terms and costs under which the alliance will operate. Even while maintaining an alliance grounded in shared values and security, Seoul must be prepared for tariffs, investment, defense costs and strategic contributions to be linked to one another.

Last week, Trump announced that South Korea would invest $50 billion in an Alaska liquefied natural gas project. After the South Korean government countered that the project was still under review, Trump stepped up the pressure on Friday, implying financial consequences if Seoul didn't sign soon. 

To respond to the growing costs Trump is attaching to the alliance, critics say the South Korean government must stop treating security, trade, industry and diplomacy as separate issues. They say Seoul needs an integrated diplomatic, security and trade strategy that maintains the alliance's traditional security foundation while managing U.S. investment, tariffs, supply chains and cooperation in third regions on a single negotiating table.

“Now more than ever, we desperately need a capable command center that can manage all of this in an integrated way,” a trade expert said.

BY CHUNG YEONG-GYO, LEE YU-JUNG [[email protected]]