U.S. President Donald Trump and Japanese Prime Minister Shigeru Ishiba issued a joint statement on Feb. 7, opposing “any attempts by China to change the status quo by force or coercion in the East China Sea.” On Taiwan, they emphasized the importance of “peace and stability.” The statement also reaffirmed support for U.S.-led coalitions such as the Quad — comprising the U.S., Japan, Australia, and India — as well as other regional partnerships, including those involving the Philippines, underscoring a united front against China’s influence.
Since his first term, Trump has pursued a containment strategy against China. This time, he has floated the possibility of imposing tariffs as high as 60%. The implications are concerning for South Korea, whose largest trading partner is China, followed by the U.S. A tit-for-tat trade war involving tariffs and export controls between Washington and Beijing would inevitably harm South Korea’s export-dependent economy.
Semiconductors, which account for 20% of South Korea’s exports, are particularly vulnerable. If the U.S. imposes stricter restrictions on semiconductor exports to China, including those with lower technological specifications, South Korean exports could take a significant hit. The Bank of Korea projects that if Trump enforces a 60% tariff on Chinese imports, South Korea’s exports to China could decline by more than 6%.
Despite the risks, Trump’s efforts to reorganize the global supply chain could present opportunities for South Korea. Washington’s recent focus on nuclear energy cooperation with Seoul exemplifies this trend. Expanding cooperation to include fields such as AI and quantum computing could further bolster South Korea’s technological edge. Although China has caught up in most industries outside semiconductors, it remains in a catch-up phase in that crucial sector. Trump’s containment strategy may provide South Korea with a window to maintain its competitive advantage.
Trump also indicated to the Japanese prime minister his intention to reestablish ties with North Korean leader Kim Jong-un. On the same day, Kim publicly vowed to strengthen North Korea’s nuclear capabilities and condemned military cooperation among South Korea, the U.S., and Japan. With South Korea’s leadership in disarray, the prospect of a renewed “nuclear deal” between Trump and Kim raises concerns.
Trump has previously expressed openness to South Korea and Japan developing their own nuclear arsenals. A newly appointed U.S. deputy defense secretary also suggested that South Korea consider nuclear armament as a counterbalance to China, given its strategic importance in the region.
Relations between North Korea and China are currently at their worst in decades. Beijing has even removed the commemorative “footprint plaque” marking Xi Jinping and Kim Jong-un’s 2018 stroll in Dalian. While North Korea has historically had a complex relationship with China, direct tensions between top leaders are rare and significant, given the authoritarian nature of both regimes.
China has cut off the inflow of North Korean labor, a vital source of revenue for Pyongyang, while North Korea has switched its international satellite broadcaster from a Chinese service to a Russian one. With North Korea sending troops to Russia, ties between Pyongyang and Moscow are strengthening as its relationship with Beijing frays. A total breakdown in relations would leave Kim in a precarious position, given that over 95% of North Korea’s trade depends on China.
As Trump’s policies reshape South Korea’s economic and security landscape, both challenges and opportunities loom large. Navigating this dynamic environment and seizing emerging opportunities will test South Korea’s strategic capabilities.
