What the Election of Donald Trump Means for South Korea

It was an amazing US election to see Donald Trump defy expectations and win the US Presidency over Hillary Clinton.  Congratulations to him and his campaign team.  His election will definitely be something that political scientists will be talking about for decades to come.  By the way I thought his acceptance speech was really good:

“Now it’s time for America to bind the wounds of division, have to get together. To all Republicans and Democrats and independents across this nation, I say it is time for us to come together as one united people. I pledge to every citizen of our land that I will be president for all Americans,” he said.

To countries around the world, Trump said, “While we will always put America’s interests first, we will deal fairly with everyone, with everyone.”

“All people and all other nations. We will seek common ground, not hostility, partnership, not conflict,” he said.  [Yonhap]

Here is what South Korean President Park Geun-hye had to say about the election of Donald Trump:

The commander-in-chief made the remarks during a briefing on the outcome of the National Security Council (NSC) session after Republican Donald Trump won the White House in a hard-fought race against Democratic rival Hillary Clinton.

“Given the United States is our ally and that the South Korea-U.S. relationship has a great impact on our diplomacy, security and economy, I think we need to extensively explore ways to develop close relations with the incoming Trump administration,” she said.

“In light of the grave situation in which North Korea’s nuclear and missile threats are growing day by day, I call on you to establish cooperative ties with the incoming U.S. administration early in the stage of the government transition,” she added.  [Yonhap]

So what does Donald Trump’s victory mean for the people of South Korea who were deeply against the election of Trump?  Here are my quick thoughts on the biggest areas that the ROK should expect possible impacts on:

• USFK Cost Sharing: Donald Trump has made no secret of his desire to see US allies pay more to support US forces.  To keep this campaign promise I would expect that Trump will ask that South Korea pay more for the upkeep of US forces.  Currently the ROK pays about 50% for upkeep while Japan pays about 75%.  I would expect that South Korea will be asked to pay a number closer to what Japan pays.

• US-ROK Free Trade Agreement: Due to Trump’s election victory the Korean stock market has tanked.  The market tanked because of fears that Trump will want to renegotiate the US-Korea Free Trade Agreement:A key concern is Trump’s “America first” position that includes a preference for trade protectionism.“The market will inevitably face a short-term adjustment if Trump wins,” said Kim Ji-na, a fixed income analyst at IBK Securities. “There’s even a possibility that the 1,900 barrier could fall as Trump’s victory will only raise instability and bring about policy risks.”The bigger concern is that Korea’s economy, which has been facing tough times due to shrinking exports, will suffer heavily.“The Trump victory will not only act as a potential risk for the Korean market but also the global economy,” said Hwang Na-young, a Woori Finance Research Institute researcher. “Once Trump and the Republicans take over, most of the major policies of the Barack Obama years will be reversed: repealing Obamacare, huge tax cuts, easing of financial regulations and a preference for fossil fuel.

  “Major changes are likely in regards to trade policies as protectionism deepens on top of an isolationist approach to diplomatic polices.”  [Joong Ang Ilbo]

  Here are some facts and figures about Korea-US trade from the Joong Ang Ilbo article:

• I would be surprised if Trump makes it a priority to go after the US-ROK FTA.  Considering the amount of manufacturing jobs brought to the US from Korean car manufacturers it seems the US-ROK FTA is a deal he would want to keep in place.  I think his immediate focus will be on the Trans-Pacific Partnership (TPP) and the North American Free Trade Agreements (NAFTA) which he has been highly critical of.

• North Korea Nuclear Issue: I don’t see Trump wanting to make any nuclear agreement with Kim Jong-un considering the country’s past track record of violating the agreements.  What I do think he will do is push for more sanctions against Chinese banks and businesses in an effort to pressure the Chinese government to reign in North Korea:
  

  Trump also identified North Korea as a problem for China, not the U.S.

  “I would get China to make that guy disappear, in one form or another, very quickly,” Trump said in February on the CBS TV program “This Morning.”

  “China has absolute control of North Korea. They won’t say it, but they do. And they should make that problem disappear.” [Korea Times]

• Immigration: Any Koreans living illegally in the US and hoping for amnesty should probably forget about that idea happening anytime soon.  With that said I do think ironically that with a President Trump an immigration reform deal is more likely because he will try and cut a deal that is not blanket amnesty, but at the same time provides a process for foreign workers to be sponsored to work in the US.  This would reduce illegal immigration across the US-Mexico border and possibly allow him to say he does not need to fully build his famous wall.

Conclusion: So those are my quick thoughts on what the election of Donald Trump means for South Korea.  I think the biggest impact is that the ROK should expect to pay more for the upkeep of USFK.  If not then Trump may begin relooking the US-ROK FTA which South Korea has much more to lose.  Does anyone else have any other areas that they foresee that a President Trump will have a significant impact on in South Korea over the next four years?  If so please share your opinions in the comments section.