{"id":2208315,"date":"2025-02-07T15:59:37","date_gmt":"2025-02-07T06:59:37","guid":{"rendered":"https:\/\/koreapro.org\/?p=2208315"},"modified":"2025-02-10T15:46:09","modified_gmt":"2025-02-10T06:46:09","slug":"lee-jae-myungs-china-pivot-could-reshape-south-koreas-trade-and-security","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2025\/02\/lee-jae-myungs-china-pivot-could-reshape-south-koreas-trade-and-security\/","title":{"rendered":"Lee Jae-myung\u2019s China pivot could reshape South Korea\u2019s trade and security"},"content":{"rendered":"

China\u2019s new <\/span>export controls<\/span><\/a> on tungsten, molybdenum and other key materials have raised alarms in South Korea\u2019s semiconductor and defense industries. At the same time, the U.S. is expanding its <\/span>semiconductor export controls<\/span><\/a> and imposing <\/span>tariffs on allies<\/span><\/a>, signaling an increasingly protectionist trade policy.<\/span><\/p>\n

South Korea finds itself caught between two economic superpowers, and its next president will determine its geopolitical and economic trajectory.<\/span><\/p>\n

Lee Jae-myung, the current frontrunner in South Korea\u2019s likely presidential race, is expected to take a different approach from his predecessor, Yoon Suk-yeol. Whereas Yoon aligned South Korea closely with Washington on security and trade, Lee is likely to prioritize <\/span>economic pragmatism<\/span><\/a> over ideological alignment.<\/span><\/p>\n

His administration will likely seek to rebalance South Korea\u2019s approach to China, emphasizing trade and supply chain stability while carefully managing U.S. security expectations. However, this strategy will come with trade-offs, diplomatic risks and potential economic consequences.<\/span><\/p>\n

SHIFT FROM PRO-US STANCE<\/b><\/p>\n

Yoon Suk-yeol\u2019s administration pursued deepened defense and economic <\/span>trilateral cooperation<\/span><\/a> with the U.S. and Japan, strengthening ties with <\/span>NATO<\/span><\/a>, joining semiconductor restrictions against China, and exploring participation in <\/span>AUKUS Pillar II<\/span><\/a>. These moves aimed to position South Korea as a key player in Washington\u2019s Indo-Pacific strategy but strained relations with Beijing.<\/span><\/p>\n

Lee, by contrast, has consistently <\/span>argued<\/span><\/a> that South Korea should not become entangled in a \u201cnew Cold War.\u201d To this end, his <\/span>foreign policy<\/span><\/a> is expected to prioritize economic stability over rigid ideological commitments.<\/span><\/p>\n

While Lee is unlikely to completely reverse Yoon\u2019s policies, he does look set to slow down or revise South Korea\u2019s participation in U.S.-led technology restrictions and security frameworks. His emphasis on pragmatic diplomacy suggests that he will seek a more independent stance that allows South Korea to maintain strong economic ties with China while avoiding excessive reliance on any single global power.<\/span><\/p>\n

\"\"

Democratic Party leader Lee Jae-myung meets with then-Chinese Ambassador to South Korea Xing Haiming, June 8, 2023 | Image: Democratic Party of Korea via Facebook<\/a><\/em><\/p><\/div>\n

ECONOMIC NEED TO ENGAGE CHINA<\/b><\/p>\n

China remains South Korea\u2019s <\/span>largest trade partner<\/span><\/a>, accounting for $148.98 billion in exports and $119.72 billion in imports in 2023. South Korea\u2019s semiconductor, petrochemical and automobile industries all rely on China for both demand and supply chain stability.<\/span><\/p>\n

Beijing\u2019s recent export controls on tungsten and molybdenum, critical to South Korea\u2019s semiconductor and defense sectors, highlight how vital China\u2019s role is in maintaining supply chain security.<\/span><\/p>\n

China has previously restricted exports of <\/span>gallium, germanium and graphite<\/span><\/a>, causing significant disruptions in global markets. If further restrictions are imposed, South Korean firms such as Samsung Electronics and SK Hynix could face higher costs and production delays.<\/span><\/p>\n

To mitigate these risks, Lee is expected to engage Beijing directly in supply chain negotiations, leveraging the Regional Comprehensive Economic Partnership (RCEP) to strengthen economic ties and reduce trade disruptions.<\/span><\/p>\n

Whereas the Yoon administration has not completely neglected the country\u2019s ties with China, with the <\/span>latest bilateral meeting<\/span><\/a> occurring just days after Yoon\u2019s martial law declaration to discuss both countries\u2019 free trade agreement, Lee will likely prioritize these negotiations and meetings.<\/span><\/p>\n

Moreover, Lee\u2019s administration will likely take a more cautious approach in adhering to U.S. semiconductor restrictions, balancing the need to maintain trade relations with China while avoiding retaliation from Washington.<\/span><\/p>\n

NAVIGATING U.S. TRADE PRESSURE<\/b><\/p>\n

The U.S. has been tightening semiconductor and AI export controls to limit China\u2019s access to cutting-edge technology. For instance, the Biden administration <\/span>tightened restrictions<\/span><\/a> on AI exports to safeguard national security, while ensuring that South Korea remains exempt. However, the exemption is contingent on Seoul\u2019s continued compliance with U.S. policies.<\/span><\/p>\n

However, Donald Trump\u2019s return to the White House has intensified Seoul\u2019s concerns over U.S. protectionism. Although put on <\/span>pause<\/span><\/a> until March 4, the Trump administration has already imposed 25% tariffs on Canada and Mexico over the opioid crisis, signaling a willingness to use economic pressure even against allies.<\/span><\/p>\n

Trump has also floated the possibility of tariffs on South Korea, Japan, Taiwan and the European Union. Lee\u2019s government will focus on treading these trade tensions carefully, seeking exemptions for key South Korean exports while resisting full-scale decoupling from China.<\/span><\/p>\n

Lee is expected to maintain compliance with core U.S. semiconductor export restrictions but may push back against Washington\u2019s more aggressive demands. His administration will likely emphasize South Korea\u2019s strategic role as a technological powerhouse and seek to negotiate carve-outs in U.S. trade policies that allow for continued exports to China without triggering penalties.<\/span><\/p>\n

However, with Trump\u2019s commerce secretary nominee, Howard Lutnick, <\/span>accusing<\/span><\/a> countries such as South Korea and Japan of having \u201ctaken advantage of\u201d America\u2019s \u201cgood nature,\u201d and suggesting that he would not honor the Biden administration\u2019s <\/span>pledge<\/span><\/a> to provide U.S. federal grants and loans to South Korean businesses that have invested in the U.S., it remains unclear how successful Lee\u2019s administration will be in seeking such exemptions.<\/span><\/p>\n

\"\"

U.S. Secretary of State Marco Rubio, National Security Adviser Mike Waltz and Secretary of Defense Pete Hegseth meet to discuss implementing President Donald Trump’s policies, Jan. 29, 2025 | Image: White House<\/a><\/em><\/p><\/div>\n

REDEFINING RELATIONS WITH CHINA<\/b><\/p>\n

Lee\u2019s approach to China will likely extend beyond trade, shaping a broader diplomatic strategy to secure South Korea\u2019s long-term economic and political interests. His administration may push for expanded cooperation in emerging industries, including renewable energy and electric vehicles, areas where China holds strategic advantages.<\/span><\/p>\n

Moreover, strengthening South Korea\u2019s role in regional trade agreements, such as RCEP, could provide an alternative to over-reliance on either Beijing or Washington.<\/span><\/p>\n

Further, Lee\u2019s engagement strategy is expected to prioritize stabilizing trade ties with China while avoiding overt security realignments that could trigger backlash from the U.S.<\/span><\/p>\n

Lee\u2019s challenge will be maintaining leverage between both superpowers while ensuring South Korea\u2019s national interests remain intact.<\/span><\/p>\n

RISKS OF LEE\u2019S APPROACH<\/b><\/p>\n

If Lee moves too quickly toward a China-friendly trade policy, he risks economic retaliation from Washington. The U.S. has already demonstrated a willingness to penalize allies for policies that undermine its economic agenda. Should Washington perceive Lee\u2019s overtures toward China as weakening its Indo-Pacific strategy, South Korea could face new tariffs or limitations on access to U.S. markets.<\/span><\/p>\n

On the other hand, China\u2019s past behavior suggests that relying too heavily on economic ties with Beijing carries its own dangers. The Terminal High Altitude Area Defense missile defense <\/span>dispute<\/span><\/a> in 2017 led to severe economic retaliation from China, targeting South Korean tourism, retail and entertainment industries. If tensions flare again, South Korea could find itself subject to similar economic coercion.<\/span><\/p>\n

Moreover, trade relations between South Korea and China have transformed over the years. Whereas both countries\u2019 trade relations were based on a complementary partnership in the past, Chinese companies\u2019 aggressive move toward high-end technology production has made that partnership more competitive.<\/span><\/p>\n

Further, increased enmity between the two countries over the past few years have made it increasingly difficult for South Korean companies to retain the competitive advantage they once enjoyed in China as many Chinese consumers now prefer Chinese-made products to South Korean ones.<\/span><\/p>\n

Domestically, Lee\u2019s China policy could face significant resistance. South Korea\u2019s public remains <\/span>skeptical<\/span><\/a> of Beijing\u2019s influence, and any perceived overreach in favoring China over national security concerns could provoke backlash from conservative lawmakers and activist groups, who have long <\/span>accused<\/span><\/a> Lee of being pro-Chinese.<\/span><\/p>\n

Balancing these competing pressures will be one of Lee\u2019s most difficult tasks.<\/span><\/p>\n

\"\"

South Korean President Yoon Suk-yeol (left), U.S. President Joe Biden (center) and Japanese Prime Minister Fumio Kishida (right) meet at Camp David for their trilateral summit, Aug. 18, 2023 | Image: ROK Presidential Office<\/a><\/em><\/p><\/div>\n

CHALLENGING TASK<\/b><\/p>\n

If Lee Jae-myung becomes South Korea\u2019s next president, his administration will likely mark a shift from Yoon Suk-yeol\u2019s hardline alignment with Washington to a more pragmatic, economy-first approach.<\/span><\/p>\n

While he will likely argue that engaging China makes economic sense, it will come with significant trade-offs. As the U.S.-China trade war escalates, South Korea remains caught in the middle, forced to navigate both economic pressures from Beijing and security expectations from Washington.<\/span><\/p>\n

The biggest challenge for Lee will be maintaining South Korea\u2019s trade access to China without jeopardizing its standing with the U.S. If Lee moves too quickly toward Beijing, South Korea could face American trade penalties while still being vulnerable to Chinese economic coercion.<\/span><\/p>\n

To extricate the country from this Gordian Knot, Lee, like his predecessors before him, will likely pursue a long-term strategy of diversifying trade partnerships beyond the U.S. and China, such as with Southeast Asia, Africa, Latin America and the Middle East. However, this will be a costly and slow process.<\/span><\/p>\n

For the foreseeable future, Lee will also have to manage the country\u2019s increasingly difficult task of balancing ties between the U.S. and China. However, it remains unclear whether a President Lee Jae-myung will be able to be as direct and effective as opposition leader Lee Jae-myung has been.<\/span><\/p>\n

Edited by Alannah Hill<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Defense & Security<\/span><\/a>Inter-Korean & Foreign Relations<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

China\u2019s new export controls on tungsten, molybdenum and other key materials have raised alarms in South Korea\u2019s semiconductor and defense industries. At the same time, the U.S. is expanding its semiconductor export controls and imposing tariffs on allies, signaling an increasingly protectionist trade policy. South Korea finds itself caught between two economic superpowers, and its […]<\/p>\n","protected":false},"author":10407,"featured_media":2208316,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,26,28],"class_list":["post-2208315","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-defense-security","tag-inter-korean-foreign-relations"],"yoast_head":"\nLee Jae-myung\u2019s China pivot could reshape South Korea\u2019s trade and security - Korea Pro<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2025\/02\/lee-jae-myungs-china-pivot-could-reshape-south-koreas-trade-and-security\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Lee Jae-myung\u2019s China pivot could reshape South Korea\u2019s trade and security - Korea Pro\" \/>\n<meta property=\"og:description\" content=\"China\u2019s new export controls on tungsten, molybdenum and other key materials have raised alarms in South Korea\u2019s semiconductor and defense industries. 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