Amid Trump's tariffs, pressure grows on Seoul to shoulder more defense costs

Korea Herald

09-04-2025

Defense cost-sharing agreement could rise as key issue between Seoul, Washington in tariff negotiations, expert says
South Korea needs to brace for the possibility of shouldering more of its defense costs, with US President Donald Trump implying Seoul's payment for the 28,500 US troops stationed on the peninsula could play a big part in a broader deal between the two countries, experts said Wednesday.
Following a phone call with South Korea's acting President Han Duck-soo late Tuesday, Trump said in a post on his Truth Social platform that 'payment for the big time Military Protection' that the US provides for South Korea was mentioned in the conversation.
"I just had a great call with the Acting President of South Korea. We talked about their tremendous and unsustainable Surplus, Tariffs, Shipbuilding, large-scale purchase of US LNG, their joint venture in an Alaska Pipeline, and payment for the big time Military Protection we provide to South Korea," he wrote on Truth Social. 'Like with South Korea, we are bringing up other subjects that are not covered by Trade and Tariffs, and getting them negotiated also. 'ONE STOP SHOPPING' is a beautiful and efficient process!!!'
The phone call came a day before Trump's 25 percent "reciprocal" tariffs on South Korea, imposed on most goods imported from its Asian ally, took effect on Wednesday.
With Seoul seeking to negotiate the tariffs, the issue of defense cost-sharing for the upkeep of US Forces Korea is likely to play a key part in potential talks on a broader deal with Washington, an expert said. And it may require some sacrifices from South Korea.
'At this point, it seems the only option for South Korea is to shoulder more costs in various areas (where the US is hinting at the possibility of negotiations) and present it as a package deal,' said Kim Jung, associate professor of comparative politics at the University of North Korean Studies, via email.
'The key is to include the defense cost-sharing deal in a package alongside potential agreements in shipbuilding and liquefied natural gas, which are important leverage for South Korea at the negotiating table. Ultimately, it boils down to lessening Washington's tariff on South Korea and, in the process, Seoul may need to make some sacrifices,' he added.
Another expert pointed to the term 'one stop shopping' used by Trump as a major clue that describes what could unfold in the negotiations between Seoul and Washington.
'The term one-stop shopping reflects Trump's willingness to pursue a big deal with South Korea, and this could work to Seoul's advantage,' said Kim Yeoul-soo, senior analyst at Korea Institute for Military Affairs, via phone. 'Handling everything separately with Washington, especially with trade and North Korea issues, would put more pressure on South Korea than negotiating it as a single big package.'
The security and international relations expert at the think tank explained that shoring up Seoul's part of the defense cost-sharing deal would play a significant part in eliminating the US' bilateral trade deficit with South Korea.
'There is a high possibility that South Korea will pay more in the defense cost-sharing deal, but we would have to take it if Trump presents the big deal option, as it would be the best-case scenario for Seoul,' Kim said.
Around noon, a senior official at the acting president and prime minister's office, who declined to be named, said 'it is difficult to confirm at the moment' when asked whether the government is reviewing the option of paying more in defense costs if it leads to lower tariff rates. The official added that lowering the tariff rate is currently a top priority in the negotiations with the US.
A separate Foreign Ministry official said in the afternoon that South Korea has contributed to the allies' joint defense posture and "steady maintenance" of the USFK here through a "consistent increase in defense budget." It pledged to keep its efforts to do so and actively communicate with Washington for continued cooperation.
In October, Seoul and Washington struck a defense cost-sharing deal, dubbed the Special Measures Agreement. Under the deal for the 2026-30 period, Seoul is to pay 1.52 trillion won ($1.03 billion) in 2026, up from 1.4 trillion won this year.
Trump, who was a presidential candidate at the time, called South Korea a "money machine" and said it would be paying "$10 billion a year" to keep USFK deployed on the Korean Peninsula if he had been in the White House.
His remarks prompted concerns here that Seoul would deal with earlier-than-expected renegotiations of the bilateral defense cost-sharing deal with Washington under the second Trump administration.