Trapped between US and China: South Korea Feels Trade War’s Pressure
As South Korea navigates the turbulent waters of the US-China trade war, the country’s newly elected president, Lee Jae Myung, faces crucial policy decisions. During his visit to Washington in August, he was questioned about anmigyeongjung, South Korea’s traditional stance of strategic neutrality between the US and China. This concept embodies the nation’s reliance on the US for security while seeking economic prosperity from China.
The Challenges of Maintaining Balance
– Deteriorating Neutrality: The increasing competition between the US and China complicates South Korea’s position. President Lee noted, “It is no longer possible to maintain that type of logic,” highlighting the urgent need for South Korea to choose sides.
– Significant Economic Reliance on China: China, South Korea’s largest trading partner, accounts for approximately 25% of its exports. However, trade sanctions from China, like those imposed on South Korean shipbuilder Hanwha Ocean, reveal the risks of aligning too closely with the US.
– US Demands: Amidst this complex dynamic, South Korea has committed to a $350 billion investment deal with the US, aimed at manufacturing and energy sectors. Yet, ongoing negotiations have stalled, particularly around the terms of cash investments and tariffs.
Semiconductor Technology Under Siege
– Technological Tensions: South Korea’s semiconductor industry finds itself entangled in the US-China rivalry. With China investing heavily to close the gap in high-bandwidth memory chips, South Korean giants like SK Hynix and Samsung Electronics face challenges from rising Chinese competitors.
– Potential Complications: June Park, a political economist, warns that the reduced export restrictions on AI-related technologies could have long-term repercussions, as China accelerates its own advancements.
Conclusion: Finding a Path Forward
South Korea stands at a crossroads, struggling to maintain its traditional dual approach while confronting the pressures of an escalating trade war. Balancing national security with economic interests from both the US and China will be vital for the nation’s future. As President Lee prepares for critical meetings with US leaders, the stakes are high—not just for South Korea, but for the broader regional stability. The nation must strategize effectively to navigate this delicate geopolitical landscape.