South Korean companies have paid a heavy price of late for their country’s close relationship with the US. China’s trade retaliation following South Korea’s deployment of THAAD, which was unpopular among locals even discounting Beijing’s actions, has been devastating.
Car sales to South Korea’s biggest trading partner, which accounts for almost twice as many of the country’s exports as the US, have fallen by more than half. Dozens of supermarkets have closed, and visits by Chinese tourists are down almost 70%.
The response from the Trump administration after Beijing gave the US a huge opening by antogonizing South Korean businesses?
For one, the Trump administration has publicly threatened to make South Korea pay for all of the controversial THAAD missile defense system, already a political liability for leaders in Seoul – though National Security Advisor H R McMaster reportedly went around Trump’s back to reassure Seoul this was not the case.
To add insult to injury, as talks to renegotiate the Korea-US Free Trade Agreement begin without any progress this week, we are reminded of Trump’s threats to terminate the “horrible” deal, should talks not result in more favorable terms for the US. Hopefully for the US-South Korea relationship the threat was an empty one, considering the rough start to the negotiations.
“Both sides have reached no agreement,” Trade Minister Kim Hyun-chong said after the daylong talks ended in Seoul on Tuesday. Both sides stuck to their positions, Kim said, with the US insisting on modifying the deal, and South Korea opposing any change without first conducting a joint study.