The Korean Peninsula: Make or Break

Commentary by Ellen Kim

Published September 26, 2024

This commentary is part of a report from the CSIS Geopolitics and Foreign Policy Department entitled The Global Impact of the 2024 U.S. Presidential Election. The report features a set of essays assessing the meaning of the election for Europe, Russia, Eurasia, the Indo-Pacific, the Americas, Africa, and the Middle East.

Nowhere in the Indo-Pacific could the U.S. presidential election results precipitate more disparate outcomes than on the Korean Peninsula. Changes could have broad strategic ripple effects throughout the region.

South Korea: Nuclearization in the Offing?

During Trump's presidency, White House personnel reportedly were instructed to start every briefing memo for his meetings with allied leaders with two facts: (1) the nation's bilateral merchandise trade deficit/surplus and (2) its level of defense spending relative to GDP. His disdain was highest for allies that enjoyed a trade surplus with the United States while spending less on defense, which translated to him as classic freeloading.

South Korea could easily end up in Trump's crosshairs during a second term. First, it has a $44.5 billion trade surplus with the United States, which is on track to balloon to a record high in 2024. Second, although South Korea spends 2.8 percent of GDP on defense, in Trump's mind its contributions are deficient, providing only about $1 billion annually for the cost of stationing 28,500 ground troops in Korea. While president, Trump demanded Seoul increase its contribution by five times, allowing the previous U.S.-Korea agreement to expire and precipitating a crisis in the alliance. There is no reason to believe Trump would not do the same again. Moreover, early renewal of a cost-sharing deal by President Yoon Suk Yeol and Biden to prevent Trump from derailing the alliance again will anger Trump, engendering a poor start to relations under a second Trump term.

In the last three years, South Korean companies have invested at least $79 billion in industries critical to the United States, like high-end memory chips and the clean energy transition, according to data compiled by the Korea International Trade Association. Further, South Korea built the largest U.S. military base on foreign soil, paying almost 90 percent of the $10.7 billion price tag. And yet Trump continues to see South Korea as an adversary on trade and as a freeloader on security. For this reason, Trump could levy "universal" 10-20 percent tariffs on South Korea and may seek to renegotiate or even terminate the U.S.-Korea free trade agreement (KORUS). It is unclear whether Trump would fund the CHIPS and Science Act, but he likely will take credit for the disbursements to critical swing states. He also would likely pressure South Korea on semiconductor export controls.

By contrast, a Harris administration would own many of Biden's efforts on bolstering nuclear deterrence, such as the Washington Declaration and the Nuclear Consultative Group, and on consolidating trilateral relations with Japan at the 2023 Camp David summit. Unlike Trump, Harris would substantiate these alliance ties with the high tempo of bilateral and trilateral military exercises started under Biden. She would also welcome the larger global role South Korea seeks to play in Ukraine, Taiwan, NATO (through the Indo-Pacific Four grouping), AUKUS Pillar Two, and the G7. While Trump might pay lip service to these alliance ties, he would be less interested in the military exercises (which he sees as "expensive") unless the allies pay for U.S. participation, perhaps as part of new cost-sharing arrangements.

Continuity on economic security issues would be expected in either a Harris or a Trump administration. Former Trump officials have not been critical of Biden's de-risking policies, reshoring, or supply chain protection. In fact, many see the Trump administration as starting these policies through programs like the Blue Dot Network (to counter China's Belt and Road Initiative projects) and the Clean Network (to address China's penetration of 5G networks).

But the most significant change could come with U.S. troops in Korea. A CSIS database indicates Trump wanted to pull troops from Korea long before he became a politician. One interview to this effect appeared in Playboy on March 1, 1990. Coming on the heels of a potential peace deal with North Korea, Trump could call for removal of U.S. forces from South Korea. This decoupling, as another recent CSIS report finds, would provide fodder for serious national discussions among the public and policy elites in South Korea about going nuclear.

North Korea: A Real Deal?

Both Harris and Trump would enter office with a North Korea substantially more advanced in terms of its nuclear and intercontinental ballistic missile (ICBM) capabilities. Moreover, CSIS studies show that North Korea is more belligerent in U.S. presidential election years (especially when there is no U.S.-North Korea diplomacy in place). The regime will likely spark a crisis to test the incoming administration, as it did with Biden, Obama, and Trump. But Harris's and Trump's responses could be quite different. Harris would conduct the obligatory policy review and bolster sanctions while leaving the door open to dialogue. She would also focus on strengthening bilateral and trilateral ties with South Korea and Japan and press China to support resumption of denuclearization negotiations.

Trump, by contrast, has made no secret of his affinity for North Korean leader Kim Jong-un and would likely want to restart his "love letter" exchanges once Kim initiates with a congratulatory salutation. Trump's willingness to make a deal with North Korea focuses largely on securing a permanent moratorium on nuclear tests and ICBM launches, which he would claim as a victory. But this would effectively decouple U.S. homeland security from the short- and medium-range ballistic missile threat to Japan and South Korea. Trump could even use such a cursory deal to push for a peace treaty with North Korea to end the war but effectively recognize North Korea as a nuclear weapons state. This move could have untold ramifications for South Korean and Japanese debates about nuclearization.

Policy Recommendations for the Next U.S. Administration

• Prioritize bilateral and trilateral alliance deterrence. Early summitry provides good action-forcing deliverables and messaging at a critical time. Washington and Seoul have a great degree of policy alignment regionally and globally. It is important to bolster and elevate alliance ties with South Korea and Japan (even the Philippines and Australia as well) in the face of the new security agreement between North Korea and Russia, as well as their relationships with China and Iran.
• Return to trade and market access. Although this recommendation is, admittedly, a tall order given the politics of U.S. political parties, the U.S. position in the region is weakened without a proactive platform on free trade, once traditional in U.S. policy. Innovative ways to bring back the trade agenda include incorporating preferential market access into de-risking and impact mitigation measures for countries affected by economic coercion.
• Maintain nonproliferation mandates while bolstering extended deterrence. The growth of China's nuclear arsenal and the inability to stem North Korea's will invariably raise questions about nuclearization among allies. To the extent the United States sees nonproliferation as an important interest, the next administration must not only bolster deterrence but also avoid rhetoric and negotiations that suggest decoupling from allies' security.
• Take a holistic view of the trade relationship. While South Korea will register one of the largest trade surpluses among U.S. allies in 2024, Washington should avoid knee-jerk reactions and instead weigh this aspect of the economic relationship against allied cooperation on supply chains, export controls, and investment in U.S. states that are creating jobs.
• Avoid quick deals on North Korea. Pyongyang will start fires that the next administration will feel compelled to douse. But a careful policy review, policy coordination with allies, a robust sanctions strategy, and preservation of alliance equities should be the touchstones of a path forward.

Ellen Kim is senior fellow and deputy director of the Korea Chair at the Center for Strategic and International Studies in Washington, D.C.

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