Updated December 11, 2019
South Korea: Background and U.S. Relations
Overview
preventive military strike, which could have triggered
South Korea (officially the Republic of Korea, or ROK) is
DPRK retaliation against South Korea. The combination of
one of the United States’ most important strategic and
the fear of war, an ideological preference for engagement,
economic partners in Asia. The U.S.-ROK Mutual Defense
and a belief that South Korea should shape the future of the
Treaty, signed in 1953 at the end of the Korean War,
Korean Peninsula drove Moon to improve inter-Korean
commits the United States to help South Korea defend
relations and push for U.S.-DPRK talks.
itself, particularly from North Korea (officially the
Democratic People’s Republic of Korea, or DPRK), and the
alliance has given the United States a partner and a forward
presence in Asia that help it promote U.S. interests in East
Asia. Approximately 28,500 U.S. troops are based in the
ROK. The U.S.-ROK economic relationship is bolstered by
the U.S.-South Korea Free Trade Agreement (KORUS
FTA). South Korea is the United States’ seventh-largest
trading partner, and the United States is South Korea’s
second-largest trading partner, behind China.
Policy cooperation between the United States and South
Korea has been inconsistent under the administrations of
Donald Trump and Moon Jae-in. Moon, a progressive, was
elected in May 2017 after a decade of conservative rule. On
the one hand, Moon and Trump have aligned aspects of
their approaches toward North Korea, with both pursuing a
rapprochement with Pyongyang in 2018 and 2019. They
also navigated a potentially major trade dispute by agreeing
in 2018 to relatively minor revisions to the KORUS FTA.

On the other hand, underlying tensions have begun to
In 2018, DPRK leader Kim Jong-un declared “victory” in
surface. The U.S.-ROK “Special Measures Agreement”
developing nuclear warhead and ICBM capability, said he
(SMA) on how to divide the costs of basing U.S. troops in
would suspend nuclear testing, and signaled his willingness
South Korea expires at the end of 2019. The Trump
to engage in talks with the United States and South Korea.
Administration has demanded Seoul increase its payments
Kim and Moon met three times during the year, both before
by 400%, and Trump publicly said it is debatable whether
and after Kim’s summit with Trump in Singapore in June, a
the U.S. troop presence is in U.S. interests. Latent
meeting Moon brokered. During his diplomatic outreach,
disagreements over North Korea policy also may flare up,
Kim pledged to: “work toward complete denuclearization
particularly if U.S.-North Korea relations return to an
of the Korean Peninsula;” not conduct nuclear or long-
antagonistic state. Trump’s tendency to change policy
range missile tests while dialogue with the United States
unexpectedly adds a further element of uncertainty to U.S.-
continues; and allow the “permanent dismantlement” of
ROK relations.
North Korea’s Yongbyon nuclear site. He and Moon also
North Korea Policy Coordination
negotiated a military confidence-building arrangement.
North Korea is the dominant strategic concern within the
Kim and Trump met again in Hanoi in February 2019, but
U.S.-South Korea relationship. In 2016 and 2017, North
the negotiations collapsed due to differences over the scope
Korea conducted scores of missile tests and three nuclear
and sequencing of concessions, specifically North Korean
weapons tests, demonstrating major strides in its ability to
denuclearization measures in exchange for sanctions relief.
strike the continental United States with a nuclear-armed
Despite a third Trump-Kim meeting for one hour in June
ballistic missile. The Obama and Trump Administrations
2019, U.S.-DPRK and inter-Korean diplomacy has stalled.
responded by expanding multilateral and unilateral
Moreover, since May 2019, North Korea has conducted
sanctions against North Korea.
multiple short-range ballistic missile tests in violation of
United Nations prohibitions. Since the Hanoi summit,
After taking office in May 2017, Moon supported Trump’s
North Korea also has refused to interact with South Korea,
“maximum pressure” campaign, but also retained his
despite Moon’s efforts. Kim has warned that he will only
longstanding preference for engaging Pyongyang. During
wait until the end of 2019 to see if the United States offers
2017, Trump Administration officials, including the
more sanctions relief and security guarantees, raising the
President, repeatedly raised the possibility of launching a
possibility that the DPRK will resume major provocations.
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South Korea: Background and U.S. Relations
Under Moon, Seoul generally has favored offering more
Japan’s occupation; Japan’s June 2019 imposition of
and earlier concessions to Pyongyang than Washington.
procedural hurdles on exports to South Korea of key
International and U.S. sanctions prevent Moon from doing
technology materials; and South Korea’s August 2019
more without U.S. approval, further contributing to periodic
decision to abandon a ROK-Japan military intelligence-
tensions. In late 2018, the United States and ROK created a
sharing pact. This final move threatened to further erode
working group that has helped improve coordination, but
U.S.-ROK-Japan security cooperation. After heavy U.S.
significant disagreements in approach remain.
pressure, Seoul in November 2019 agreed to delay its
withdrawal from the agreement. Many analysts have
U.S.-South Korea Security Issues
criticized the U.S. for not exerting such pressure earlier to
In addition to the presence of U.S. troops, South Korea is
prevent ROK-Japan relations from deteriorating.
included under the U.S. “nuclear umbrella” (also known as
extended deterrence), and traditionally has paid for about
U.S.-South Korea Economic Relations
50% (over $800 million annually) of the total non-
In 2018, U.S. goods and services exports to the ROK
personnel costs of the U.S. military presence, according to
totaled $82.0 billion, while imports totaled $87.3 billion.
congressional testimony by U.S. military officials. U.S. and
Since the 2012 KORUS FTA’s entry into force, bilateral
ROK negotiators are currently in talks to renew the existing
trade flows have increased, with U.S. services exports
SMA agreement, which will expire on December 31, 2019.
(+$7.9 billion to $24.6 billion in 2018) and auto imports
Given ROK resistance to the Trump Administration’s
(+$6.9 billion to $22.4 billion in 2018) seeing the largest
desire for a fivefold increase in ROK payments, it is likely
gains. FDI also increased markedly from 2012 to 2018,
that the current agreement will expire and talks will extend
with the stock of South Korean FDI in the United States
into 2020 and require a new framework for burden-sharing.
more than doubling to $58.3 billion and U.S. FDI to South
The SMA needs to be approved by the ROK National
Korea increasing by one-third to $41.5 billion.
Assembly, and the ROK public is strongly opposed to
meeting the U.S. demand, according to opinion polls.
In 2018, at Washington’s request, the two countries
negotiated limited modifications to the KORUS FTA. South
President Trump’s demands for a steep increase in ROK
Korea agreed to a number of concessions, most prominently
contributions, paired with his criticism of the value of other
a delay until 2041 in reductions to U.S. light truck tariffs.
U.S. alliances has raised concerns in Seoul about U.S.
Conclusion of these negotiations and the Trump
security commitments. To facilitate talks with the DPRK,
Administration’s decision to target potential Section 232
Trump canceled major U.S.-ROK military exercises,
auto import restrictions on Japan and the European Union
leading to questions about the alliance’s readiness.
rather than South Korea, has somewhat eased bilateral trade
tensions. A number of U.S. import restrictions on South
The U.S. military is relocating its forces farther south from
Korean products, including steel, aluminum, washing
the border with North Korea, with South Korea paying $9.7
machines and solar products, however, continue to add
billion—about 94% of total costs—to construct new
friction to the trading relationship.
military facilities. The U.S. departure from these bases,
particularly one in Seoul, will allow for the return of
South Korean Politics
valuable real estate to South Korea. The recently opened
Moon belongs to the Minjoo Party, which controls a
Camp Humphreys is the world’s largest overseas U.S. base.
plurality of seats in South Korea’s National Assembly. The
next National Assembly elections are scheduled for April
South Korea’s Regional Relations
2020. Moon’s approval ratings have fallen from about 60%
Because of North Korea’s growing economic dependence
during his first year in office to the 40%-50% range, due in
on China since the early 2000s, South Korea calibrates its
part to discontent over South Korea’s slowing economic
North Korea policy with an eye on Beijing’s relations with
performance and political scandals in his Cabinet. The next
Pyongyang. China is South Korea’s largest trading partner
presidential election is scheduled for May 2022. South
and destination for foreign direct investment (FDI), and
Korean presidents are limited to one five-year term.
Beijing has in the past punished South Korean companies
when it disagrees with Seoul’s policy decisions. For these
Figure 1. South Korea’s National Assembly
and other reasons, South Korea generally tries to avoid
antagonizing China. An exception was Seoul’s 2016
decision to deploy a U.S. missile defense system in South
Korea. China responded by enacting economic measures
that have cost ROK companies billions of dollars.
Ties with Japan are perennially fraught because of sensitive

historical issues stemming from Japan’s colonization of the
Source: National Assembly of South Korea.
Korean Peninsula from 1910 to 1945. Four events in 2018
and 2019 damaged ROK-Japan relations: Moon’s steps to
Mark E. Manyin, Specialist in Asian Affairs
effectively terminate a 2015 ROK-Japan agreement on
“comfort women” who
Emma Chanlett-Avery, Specialist in Asian Affairs
were forced to provide sexual
Brock R. Williams, Analyst in International Trade and
services to Japanese soldiers during the 1930s and 1940s;
South Korean Supreme Court rulings that Japanese firms
Finance
should compensate South Koreans for forced labor during
IF10165
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South Korea: Background and U.S. Relations


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