Trapped Between the US and China: South Korea Feels Trade War’s Pressure
As South Korea navigates the turbulent waters of the US-China trade war, its newly elected president, Lee Jae Myung, is faced with pivotal policy decisions. His recent visit to Washington highlighted the concept of anmigyeongjung, South Korea’s traditional stance of strategic neutrality, which emphasizes reliance on the US for security while pursuing economic prosperity from China.
The Challenges of Maintaining Balance
– Deteriorating Neutrality: The escalating competition between the US and China complicates South Korea’s position. President Lee remarked, “It is no longer possible to maintain that type of logic,” stressing the urgent necessity for South Korea to choose sides.
– Significant Economic Reliance on China: As South Korea’s largest trading partner, China accounts for approximately 25% of the nation’s exports. However, the risks of too close an alignment with the US were laid bare by trade sanctions, such as those affecting South Korean shipbuilder Hanwha Ocean.
– US Demands: Amid this complex dynamic, South Korea has entered into a $350 billion investment deal with the US, focusing on the manufacturing and energy sectors. However, ongoing negotiations are stalled, particularly concerning cash investment terms and tariffs.
Semiconductor Technology Under Siege
– Technological Tensions: The US-China rivalry has deeply affected South Korea’s semiconductor industry. With China investing significantly to catch up in high-bandwidth memory chips, South Korean giants like SK Hynix and Samsung Electronics face increasing competition from Chinese counterparts.
– Potential Complications: According to political economist June Park, the reduction of export restrictions on AI-related technologies may yield long-term risks, allowing China to accelerate its technological advancements.
Conclusion: Finding a Path Forward
South Korea stands at a pivotal crossroads, struggling to uphold its traditional dual approach while contending with the pressures from an escalating trade war. Balancing national security with economic interests from both the US and China is crucial for the nation’s future. As President Lee anticipates critical discussions with US leaders, the stakes are high—not just for South Korea, but for broader regional stability. The nation must effectively strategize to navigate this delicate geopolitical landscape and determine its path forward.