Search Results for: cost sharing trump

I sure hope the US negotiators are using a possible Trump presidency as leverage during these negotiations:

A U.S. delegation for defense cost sharing talks with South Korea arrives at the Korea Institute for Defense Analyses in Seoul to hold a three-day fourth round of negotiations on June 25, 2024. (Yonhap)

Seoul and Washington launched the negotiations in April to renew the cost-sharing deal, known as the Special Measures Agreement (SMA), amid the view that South Korea is seeking an early deal to avoid tough bargaining in case former U.S. President Donald Trump returns to the White House. 

Under Trump’s presidency, Washington had demanded more than a fivefold increase in Seoul’s payment to US$5 billion. 

The current six-year SMA, due to expire at the end of next year, committed South Korea to paying $1.03 billion for 2021, a 13.9 percent increase from 2019, and increasing the payment every year for the subsequent four years in line with the rise in Seoul’s defense spending. 

South Korea has said it seeks to have negotiations based on the position that its share should come at a “reasonable level,” to create an environment for the stable stationing of the U.S. Forces Korea (USFK) and to strengthen the allies’ combined defense posture.

Yonhap

You can read more at the link.

This is probably a smart move by the ROK to complete cost sharing negotations before any potential of Donald Trump being elected President. During his prior presidency he put enormous pressure on the ROK to pay more for the upkeep of USFK:

Korea and the United States have agreed to begin talks on their next deal on defense cost sharing earlier than planned, sources said, Jan. 16. Yonhap

Korea and the United States have agreed to begin talks on their next deal on defense cost sharing earlier than planned, sources said Tuesday, a move that appears to consider the possible reelection of former U.S. President Donald Trump, known for his tough bargaining on such deals.

The allies have reached an understanding to start the negotiations on sharing the costs for the upkeep of the 28,500-strong U.S. Forces Korea (USFK), this year, according to diplomatic sources familiar with the matter.

The early talks, if launched, will come nearly two years ahead of the original schedule for the deal, known as the Special Measures Agreement (SMA), currently in effect until the end of 2025 under a six-year term.

Seoul and Washington signed the SMA for 2020-26 in April 2021 after 1 1/2 years of tough haggling over how much Seoul should pay for the stationing of the USFK on its soil, as the then Trump administration had called for a sharp increase in Seoul’s share.

The early launch of the defense cost-sharing talks appear to have taken into account the possibility of Trump returning to the White House if he wins the November presidential vote.

During his term in office, Trump accused the allies of relying on the U.S. for their defense and called them “free riders” who “rip off” America. Some media had reported that Trump demanded Seoul pay $5 billion for its share, more than a fivefold increase from 2019.

Korea Times

You can read more at the link.

Here is the latest on the US-ROK cost sharing issue straight from the U.S. President himself:

U.S. President Donald Trump said Monday that he “rejected” Seoul’s defense cost-sharing offer and pressed Korea “to pay for a big percentage of what we’re doing.”  

“Now, they’ve offered us a certain amount of money, and I’ve rejected it,” Trump said at a White House coronavirus task force press briefing Monday, as Seoul and Washington struggle to sign a new bilateral Special Measures Agreement (SMA) on the upkeep of some 28,500 U.S. troops stationed in Korea. 

After months of negotiations, Korean officials at the end of last month indicated that the two sides were on the brink of signing a new deal after negotiators neared a tentative agreement which had Seoul paying a higher contribution than their previous accord but not anywhere near the amount demanded by Washington.  

U.S. officials told Reuters earlier this month that Trump decided to turn down Seoul’s offer to raise its contribution by at least 13 percent compared to the previous agreement.

“Look, you know, we’re doing a tremendous service,” said Trump in the briefing. “We have a wonderful feeling and a wonderful relationship with each other, but we have to be treated equitably and fairly.”

However, Trump appeared to deny a report that he was personally negotiating with President Moon Jae-in terms for a reduction of U.S. troops in Korea with four possible scenarios.  

“It’s not a question of reduction,” Trump said. “It’s a question of: Will they contribute toward the defense of their own nation?”

Joong Ang Ilbo

You can read more at the link, but I think what is going on is that President Trump wants a larger cash payment from the ROK while in the past the ROK has used a lot of goods and services to offset cash payments.

For example they pay the salaries of the Korean employees that work for USFK. That is money that is going back into the Korean economy. They also pay for new buildings and renovations which once again is done by Korean workers putting that money back into the economy. The ROK will also purchase civilian vehicles and give them to USFK for official use as well. The vehicles purchased is also money going back into the Korean economy.

I don’t know, but I would not be surprised that President Trump being a business man is pushing for more cash payments to USFK instead of goods and services. With the ROK parliamentary elections over I think the real negotiating can actually begin.

As I have been saying the U.S. was never going to get $5 billion from the ROK and they likely knew this, to pressure them in other areas such as increased weapons purchases and environmental clean up costs:

The top U.S. negotiator in defense cost-sharing talks with South Korea said Wednesday that his team is “not focused on” its initial demand for a five-fold increase to US$5 billion in Seoul’s financial contributions to the upkeep of American troops here.

In an interview with the Korean press corps, James DeHart also pointed out that South Korea’s weapons purchases from the United States are an “important consideration for us in the burden-sharing context.”

DeHart and his South Korean counterpart, Jeong Eun-bo, held the latest round of two-day negotiations in Seoul this week but failed to narrow the gaps over how much Seoul should pay next year and beyond for the stationing of the 28,500-strong U.S. Forces Korea (USFK).

“I do want to say, very importantly, there have been some big figures that have been repeated many times in the Korean media, and those figures do not reflect where we are in our discussions with the ROK today,” he said. ROK stands for South Korea’s official name, the Republic of Korea.

Yonhap

You can read more at the link, but if the Trump administration gets a $1 billion extra in weapons purchases and Seoul to fold on environmental clean up demands of closed out US bases will the critics give credit to Trump?

I think President Moon is telling the truth here because President Trump is likely letting his surrogates negotiate the ultimate price for him. Trump though must have given his surrogates guidance on the lowest cost he is willing to accept:

 South Korean President Moon Jae-in on Friday dismissed recent reports that U.S. President Donald Trump has named a specific price for keeping U.S. troops in South Korea, saying the leaders simply do not speak in such a manner.
“Not just President Trump but no leader of any country in the world speaks in such a manner,” the president was quoted as saying.
“Such reports can be an insult to President Trump,” he added, according to his spokesman Kim Eui-kyeom.
Moon’s remarks follow news reports that claimed the U.S. president may have asked South Korea to pay US$1.2 billion as part of costs to maintain U.S. Forces in Korea.

Yonhap

You can read more at the link.

I would not put too much stock in this statement which I think could be interpreted as rhetoric for the friendly audience and part of a negotiating strategy for US-ROK cost sharing and trade talks.  With that said the ROK would probably be wise to not totally dismiss his comments:

President Donald Trump hinted he may withdraw American troops from South Korea if the U.S. ally doesn’t concede more in trade negotiations, a newspaper reported.

The Washington Post quoted Trump as saying Wednesday in a fundraising speech that the United States was losing money on trade with South Korea as well as the military presence that is meant as protection against aggression from the North.

“We have a very big trade deficit with them, and we protect them,” Trump said Wednesday in audio obtained by the Post. “We lose money on trade, and we lose money on the military. We have right now 32,000 soldiers between North and South Korea. Let’s see what happens.”

“Our allies care about themselves,” he said in the 30-minute speech to donors in Missouri. “They don’t care about us.”  [Stars & Stripes]

You can read more at the link.

As I figured the statement made by President Trump in regards to South Korea paying for THAAD is related to upcoming US-ROK cost sharing negotiations:

National Security Adviser Gen. H.R. McMaster said Sunday that the U.S. will indeed pay for the roughly $1 billion THAAD missile defense system in South Korea, amid neighboring North Korea’s repeated ballistic test launches.

“What I told our South Korean counterpart is until any renegotiation, that the deals in place, we’ll adhere to our word,” McMaster told “Fox News Sunday.”

He spoke days after President Trump said South Korea should pay for the anti-missile system and hours after Seoul said that McMaster had assured its chief national security officer, Kim Kwan-jin, about the deal.

“The last thing I would ever do is contradict the president of the United States,” McMaster also told Fox News. “And that’s not what it was. What the president has asked us to do, is to look across all of our alliances and to have appropriate burden sharing-responsibility sharing. We’re looking at that with our great ally South Korea, we’re looking at that with NATO.”  [Fox News]

You can read more at the link.

Finally someone confronted Donald Trump on the false claims he has been making that the South Koreans pay the US nothing for assisting with their defense.  Unfortunately Trump was allowed to now claim the South Koreans pay peanuts which is not true.  The ROK has historically been paying anywhere between 43% – 47% of the cost of the US-ROK alliance.  This year the ROK is paying $861 million which is not peanuts.  Like I have always said, if someone wants to have an argument that the ROK should be paying more, that is a valid argument, but to claim they pay nothing or now pay peanuts is not accurate.  However, Mr. Trump likely knows this, but is just making a political argument that sounds good to uninformed voters:

https://www.youtube.com/watch?v=JDLKsY1UkzQ&t=34m33s

This demonstrates how concerned the ROK was of Trump winning the election that they have prioritized getting this cost sharing agreement signed before the election:

South Korea and the United States formally signed a defense cost-sharing agreement Monday, as Seoul seeks to speed up its domestic ratification procedure to ensure the stable stationing of American troops here ahead of the U.S. elections.

The signing came a month after the allies reached a new five-year deal on determining Seoul’s share of its cost for the upkeep of the 28,500-strong U.S. Forces Korea (USFK).

Foreign Minister Cho Tae-yul and U.S. Ambassador to South Korea Philip Goldberg signed the deal, known as the Special Measures Agreement (SMA), at the foreign ministry in Seoul, officials said.

Under the 12th SMA, which will last until 2030, South Korea will pay 1.52 trillion won (US$1.19 billion) in 2026, up 8.3 percent from 1.4 trillion won in 2025.

Yonhap

You can read more at the link.

Trump has brought back up the issue that South Korea should pay more for defense from U.S. troops however with the cost sharing deal recently concluded that extends to 2030, this seems like campaign rhetoric at this point. Trump is once again using a lot of hyperbole to make his greater point that allies should pay more for international security provided by U.S. troops:

Former President Donald Trump said Wednesday that America “cannot be taken advantage of any longer in trade and in the military,” reinforcing speculation that he could demand renegotiation of a recent defense cost-sharing deal with Seoul if he returns to office.

The Republican presidential candidate made the remarks during a televised town hall event hosted by Fox News, falsely claiming that South Korea does not pay for the stationing of the 28,500-strong U.S. Forces Korea (USFK).

“40,000 soldiers and we never get paid. South Korea, they don’t pay,” Trump said, apparently referring to 28,500 USFK service members.

“I made them pay. Everyone raised hell, and Biden took the deal, and he said they don’t pay anymore, and they’re a rich country. No … we have to start. We cannot be taken advantage of any longer in trade, in the military,” he added.

Yonhap

You can read more at the link.