For Korea to successfully navigate relations with the second Trump administration, South Korea and South Korean companies should highlight how they can help the United States compete with China, especially in the shipbuilding and energy sectors and through support of Ukraine. Serving in the last months of Trump’s first administration’s NSC, a singular focus on China directed every action. Even serving in the Europe directorate, I spent 90% of my day coordinating with key allies like the UK and Turkey on China-related issues. The Biden administration continued largely with Trump’s China approach but without the same singular focus, due in large part to Russia’s further invasion of Ukraine in February 2022. To best manage its relationship with the United States, South Korea should promote its companies in key sectors that offset U.S. deficiencies and help the United States compete with China, taking into account the significant relationship with China. However, if the Trump team sees Korea making an effort to “balance” its relationship with the United States with its approach to China, it could result in bilateral friction, economically and diplomatically.
During my recent trip to Seoul following the U.S. election, contacts expressed concern about Trump’s approach to the Korean peninsula, but focused less on how to address Trump’s China concerns. President-elect Trump offered an indication of how he might approach the alliance when he spoke with President Yoon on November 6 and highlighted his hope for “close cooperation with Korea in the maintenance, repair and overhaul (MRO) of ships” to support naval shipbuilding and repair. Trump likely focused on this topic given the extreme imbalance in the Chinese and U.S. shipbuilding industries that many, including NSA-nominee Mike Waltz, have pointed out publicly as a threat to U.S. national security. Korea and Korean business should take this as an invitation to work closely with the incoming team to find a way to contribute — to the U.S. economy, to U.S. national security, and to the struggle to compete with China both in terms of naval capacity as well as in our ability to move cargo and energy. To respond to such an invitation means Korean industry and the ROKG should offer specific proposals for how Korea could help the United States catch up with China, offering one approach that requires Jones Act reform and allows foreign companies to build ships in the United States with fewer impediments, and one less ambitious plan that focuses on coordination within the framework of the act. Ideally, competing Korean firms could work together to present the strongest offer, with the most expansive scale of ambition and investment, at the earliest date.
To secure and enhance strong overall bilateral ties throughout the next four years, South Korea could also cooperate with the United States to satisfy U.S. demand for electric power and to secure a global supply chain for the energy transition. Korea is uniquely positioned with its capability to build nuclear power plants and, when the Westinghouse and KEPCO negotiation concludes, Korean and U.S. firms could successfully compete for the trillions of dollars at stake as the world turns to nuclear power — with both traditional and small modular (SMR) reactors — to offer energy access to the billions of people who are currently without, power the continuing electrification of the transportation sector, and respond to the increased demand for electricity to support AI and quantum computing. In addition, China poses a threat to the United States and South Korea as it seeks monopolies by flooding the market with solar panels, inverters, electrolyzers, as well as the mineral building blocks for batteries, displays, and semiconductors. If there are not non-Chinese options for these materials and products, key to expanding the energy grid, boosting energy access and assuring the energy transition, China could weaponize its stranglehold on the modern energy sector much as Russia has weaponized its fossil fuel resources.
South Korea offers an alternative to China as a world leader in many industries, from batteries to steel to semiconductors, and plays a critical role in bolstering the western supply chain and manufacturing capacity. South Korea could offer to arm Ukraine during the ongoing conflict if the U.S. sought to reduce its support, and then to rearm Ukraine after an armistice, hopefully in 2025. Korean companies are uniquely well-equipped to rebuild Ukraine’s critical infrastructure, from roads to buildings, airports to nuclear plants, and critical energy infrastructure. After spending years working on Ukraine-related issues, attending numerous one-on-one meetings with top Ukrainian business leaders as well as the current and former President, and attending President Zelensky’s inauguration in 2019 as part of our official delegation, I am convinced that Ukraine has all the ingredients to serve as an engine for European growth once Russia and Ukraine conclude an armistice. Korea’s engagement would not only benefit Ukraine, spurring growth and energizing the European market, it would result in significant profit for Korean companies, and it would allow the United States to focus more energy on its counter-China approach and to address urgent domestic concerns.
If South Korea can effectively continue its cooperation with Japan, bilaterally and trilaterally, through efforts like the Fab 4 to secure semiconductor supply chains and through leadership in the Minerals Security Partnership that helps ensure the west has access to minerals needed for batteries, semiconductors and other key industries, Korea could offer a roadmap for how minilateral efforts can offer clear alternatives to China. Korea is currently the chair of the MSP and Korean companies like Posco play leading roles in securing critical minerals through projects like the Mehenge Project in Tanzania that offers a non-Chinese source for graphite.
Korean businesses could secure long-term growth and bolster our alliance with initial focus on investing in the U.S. shipbuilding and energy sectors. Such investment would serve to counter China while creating jobs and preserving manufacturing in the United States. Korea and Korean companies should, when they engage with the Trump team, frame their contribution, investment and potential cooperation with the United States first and foremost as part of the struggle to counter China. Korea will have good relations with the United States over the next four years if the Trump team sees Korea and Korean businesses not as competitors but as key players to help them implement their vision to compete with China.
This piece was originally published by Korea Law Times on Dec. 2, 2024. The Baker Institute has obtained copyright permission to republish the commentary from Korea Law Times. The original can be accessed here.
