The alliance, trade and national interest: What's at stake when Lee meets Trump in Washington

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The alliance, trade and national interest: What's at stake when Lee meets Trump in Washington

Published: 13 Aug. 2025, 17:53 Updated: 13 Aug. 2025, 18:00

SEO JI-EUN
[email protected]

Audio report: written by reporters, read by AI

South Korean President Lee Jae-myung, left, and U.S. President Donald Trump [EPA/YONHAP]

[EXPLAINER]

South Korean President Lee Jae Myung and U.S. President Donald Trump are set to sit for their first summit in Washington on Aug. 25, which could be a defining moment that reshapes the future of the alliance amid rising U.S.-China rivalry and geopolitical security risks and Trump's transactional view that Seoul must continually prove its value.

The intertwined nature of trade and security was showcased through Foreign Minister Cho Hyun and acting U.S. Ambassador Joseph Yun’s joint tour on Wednesday of HD Hyundai Heavy Industries’ shipyard in Ulsan to discuss a bilateral shipbuilding cooperation project dubbed "MASGA," or "Make American Shipbuilding Great Again."

The visit, aimed at bolstering industrial ties in support of reviving U.S. shipbuilding, underscored how economic collaboration is increasingly being treated as a pillar of the "comprehensive strategic alliance" alongside defense commitments. Cho said that such shipbuilding cooperation could lead to a “mutually beneficial outcome.”

High on the agenda are the future direction of the South Korea-U.S. alliance, North Korea’s growing nuclear threat, joint military drills, defense cost-sharing and recent U.S. tariffs that have jolted South Korea’s export-dependent economy.

Possible agenda of the South Korea-U.S. summit [YUN YOUNG]

At stake is not just the tenor of personal relations between the two leaders, but the very terms of an alliance that has served as the linchpin of deterrence on the Korean Peninsula for more than 70 years.

For Lee, the challenge will be safeguarding South Korea's security commitments and economic interests without being drawn too far into Trump's transactional framework. For Trump, it will be testing how far Seoul is willing to align with U.S. strategic priorities in an era of intensifying its rivalry against China and shifting burden-sharing debates.

Soliders from the U.S. Forces Korea and the Korean military are seen during the Ulchi Freedom Shield (UFS) joint drills held in Sejong on Aug. 30, 2023. [JOONGANG ILBO]

Troop downsizing and modernization — what does an alliance for a new era entail?

At the White House, Lee and Trump are expected to outline plans to “modernize” the 70-year-old alliance in light of fast-evolving threats. U.S. officials have signaled a desire to recalibrate roles: South Korea would shoulder more responsibility for deterring North Korea, freeing U.S. forces to focus on China.

In Seoul, the talk of alliance modernization triggers both hope and unease.

Gen. Xavier Brunson, commander of U.S. Forces Korea (USFK), recently stressed that adapting the alliance is vital to confront North Korea’s expanding nuclear program, its deepening alignment with Russia, and Chinese challenges to a “free and open Indo-Pacific.”

“What’s being asked of Korea is to be stronger against the DPRK [Democratic People's Republic of Korea] — that we might have the flexibility as we modernize our alliance so that we could go do other things,” Brunson said last week, suggesting U.S. troops might pivot to other regional needs.

Gen. Xavier Brunson, commander of U.S. Forces Korea (USFK), answers questions from Korean reporters in a press conference held on Aug. 8 at Camp Humphreys in Pyeongtaek, Gyeonggi. [USFK]

A recent report by the Seoul-based think tank Asan Institute for Policy Studies went further, calling this a “strategic turning point” that can no longer be avoided.

It argued that as South Korea aligns more closely with the United States in shaping the Indo-Pacific order, Seoul should accept U.S. demands for a greater counter-China role by USFK, but manage these changes to serve Korean national interests. The report recommended expanding the alliance’s mission beyond deterring North Korea to countering regional threats, maintaining current U.S. troop levels while enhancing the commander’s authority, avoiding premature transfer of wartime operational control and redeploying U.S. tactical nuclear weapons. Such changes, the report said, could even make the U.S. commander in Korea “more strategically important than his counterpart in Japan.”

Yet, South Koreans worry “modernization” could become a byword for an American drawdown.

Trump has openly pondered reducing the 28,500-strong U.S. troop presence — a legacy of the 1950—53 Korean War — unless Seoul vastly increases its support. Dating back to his first term, Trump has regularly called for South Korea to pay more for U.S. forces stationed on its soil. His administration is reportedly eyeing a steep hike in South Korea’s defense spending to 3.8 percent of GDP from its 2.6 percent, alongside a boost in Seoul’s direct contribution for U.S. troops, currently just over $1 billion.

Lee’s government, while affirming the alliance is “ironclad,” has bristled at the notion of paying a premium for protection.

During Trump's first term, Lee, then the mayor of Seongnam and an advocate of more assertive diplomacy, warned that “giving up whatever is demanded of us will only lead to us losing everything. We need to boldly assert our position.” He criticized officials from the prior interim government for even hinting at renegotiating a cost-sharing deal that was meant to last through 2030.

North Korean leader Kim Jong-un observes a firing contest by artillery subunits of the Korean People's Army on July 23 in this photo published by North Korea's state-run Korean Central News Agency. [YONHAP]

Summertime drills will start soon. What does that mean for the North Korea dilemma?

North Korea’s rapidly advancing nuclear and missile arsenal is also expected to be a central topic at the summit.

Both Lee and Trump have vowed to “strengthen the allies’ defense posture” against Pyongyang’s growing threats.

For Seoul, that means securing firmer U.S. assurances of “extended deterrence” — the U.S. nuclear umbrella meant to dissuade North Korean leader Kim Jong-un from ever using his weapons.

Washington, in turn, wants its ally to stay the course on joint defense, even as talk of South Korea potentially pursuing its own nuclear deterrent gains traction in Seoul’s strategic circles. A 2024 Chicago Council Survey indicates that about two-thirds of South Koreans favor developing an indigenous nuclear option if the U.S. security guarantee were to weaken.

Yet Lee’s approach to the North also includes an active push for “peaceful coexistence” on the peninsula.

Lee formally proposed reopening inter-Korean dialogue in a Cabinet meeting on Tuesday.

He said he wanted to turn inter-Korean ties into “a relationship that benefits both sides rather than harms them,” expressing hope that “inter-Korean dialogue and communication will gradually open up through reciprocal measures.” This builds on earlier remarks at his first National Security Council meeting that peaceful coexistence between the two Koreas is the "most realistic and practical option" for security.

The Lee-Trump summit is expected to try to reconcile these two tracks: reaffirming that the alliance’s nuclear deterrence is “ironclad” while also exploring ways to modernize it, such as better coordinating South Korean conventional strike capabilities with U.S. strategic assets.

But the timing adds complexity: on Aug. 18, just a week before the summit, Seoul and Washington will launch Ulchi Freedom Shield, their largest joint military exercise of the year.

While both governments stress the drills are defensive, Pyongyang routinely brands them as invasion rehearsals. This year, roughly half the initially planned 40 field training exercises have been postponed to September, a move Seoul frames as avoiding head-to-head confrontation.

Each Korea-U.S. drill, however, runs the risk of provoking North Korean fury.

Pyongyang issued a statement by Defense Minister No Kwang-chol condemning the exercises and conducted mortar drills, but refrained from more high-intensity provocations such as ballistic missile launches or a public military inspection by Kim himself — a sign of calibrated restraint.

Managing these escalations, while keeping alive the possibility of renewed dialogue, will be an immediate challenge as Lee and Trump meet just as the exercises conclude.

President Donald Trump, center, and Korea’s trade delegation pose for a group photo at the White House in Washington, on July 30 after reaching a tariff agreement. [WHITE HOUSE]

What role will trade negotiations play in security?

Lee arrives in Washington fresh off an intense push to mitigate the damage from Trump’s trade policies, which have increasingly blurred the line between economic and security leverage.

Since returning to the White House, Trump has unleashed a flurry of tariffs on U.S. trading partners — and South Korea, heavily reliant on exports, has been hit especially hard.

Last month, U.S. and South Korean trade officials struck a preliminary deal to dial back the tariffs, and agreed to lower the blanket tariff rate to 15 percent, including on South Korean cars — a top export.

In return, Seoul made hefty pledges: it will purchase up to $100 billion in U.S. energy exports and plans to invest $350 billion in American industries over the coming years. Those investments, in sectors like semiconductors, electric-vehicle batteries, shipbuilding and critical minerals, align with both countries’ push for supply chain security.

Still, the trade truce remains fragile.

A red baseball cap made by the Ministry of Trade, Industry and Energy to bolster diplomatic efforts in trade negotiations with the United States, aimed to symbolize Korea's ″Make American Shipbuilding Great Again″ initiative. The hat is pictured on Aug. 3. [JOINT PRESS CORPS]

Some details are unresolved and not yet on paper, and Trump may use the summit to seek further concessions. He has signaled on social media that he expects Seoul to announce specific mega-investments during the meeting to be "selected" by him.

South Korean officials privately worry that Trump’s transactional approach, what is called “one-stop shopping,” could pressure Seoul into linking defense and trade issues in one package. For example, Trump has hinted at tying tariff relief to Seoul’s purchasing of American weapons or currency policy adjustments. There is also talk in Washington of pushing South Korea to reduce nontariff barriers for U.S. firms and to curb steel exports further — politically sensitive moves for Lee’s government.

At the summit, Lee will likely emphasize how alliances should be about shared strategic values, not zero-sum transactions, even as he offers investment and cooperation to satisfy Trump.

“The South Korea-U.S. alliance is important, and we need to expand and develop that in the future — from a security alliance into an economic alliance and a comprehensive alliance,” Lee said in the earlier presidential debate, underscoring his desire for a broader partnership that isn’t purely one-sided. But, he added pointedly, “that does not mean we can rely exclusively on the South Korea-U.S. alliance,” a nod to Seoul’s need to keep up ties with other powers like China.

Foreign Minister Cho Hyun, third from left, and acting U.S. Ambassador to Seoul Joseph Yun, fourth from left, are briefed by an official during their site visit to a shipyard run by Korea's HD Hyundai Heavy Industries in Ulsan on Aug. 13. [MINISTRY OF FOREIGN AFFAIRS]

What to expect from the summit?

This summit differs markedly from Trump’s headline-grabbing summits in his first term, when he bonded with South Korea’s then-President Moon Jae-in over hopes of reconciling with the North.

Those hopes have faded; today the focus is firmly back on deterrence and on updating the alliance for a more complex Indo-Pacific era. It also follows the more routine but steady alliance management seen under President Biden.

But Trump’s return has introduced new uncertainty.

As a leader who rails against “free riders” and prefers bilateral deals to multilateral norms, Trump is likely to make more pointed asks of Seoul than his predecessor did. South Korean officials, for their part, have learned from Trump’s first term, when sudden decisions, like canceling military exercises via tweet, caught allies off guard.

As the two presidents prepare to meet, both face the test of reconciling domestic politics with alliance duties. Trump will be eager to tout any wins — be it investment dollars or defense pledges — to his voters, who he says elected him to put “America First.” Lee must return home with the alliance intact and South Korea’s sovereignty and dignity preserved, showing he can stand up to Washington when needed while keeping relations cordial.

Both leaders are keen to show that the alliance can evolve — and even thrive — under new pressures, remaining, in Seoul's words, a “future-oriented comprehensive strategic alliance” fit for the challenges of 2025 and beyond.

BY SEO JI-EUN [[email protected]]

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The alliance, trade and national interest: What's at stake when Lee meets Trump in Washington

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