What Happened
As far as price hikes go, it is a large one. U.S. President Donald Trump has reportedly demanded that South Korea pay $4.7 billion next year — or 400 percent more than what it currently pays — for continued U.S. defense protection. The move comes as the Special Measures Agreement, the burden-sharing pact that covers how much South Korea pays for the U.S. military presence on its soil, is once again up for renegotiation.
This is not the first time that Trump has sought to increase the price South Korea pays for the U.S. military presence. When the Special Measures Agreement came up for negotiation last year, Trump demanded a 50 percent increase before settling on an 8 percent rise. At the same time, the countries agreed to revisit the agreement every year. Ultimately, Trump's demand is likely to hurt the key U.S.-South Korean alliance and lead Seoul to seriously question its dependence on Washington and continue its push toward more self-reliance on defense.
Why It Matters
Reportedly alarmed at the abrupt price hike, the Pentagon and the State Department are struggling to justify the increase to their South Korean partners. The two institutions are reportedly seeking to do so by counting — for the first time — readiness, joint drills and force rotations into the payment scheme. To date, South Korea has rejected these reasons, arguing that they exceed the scope of the bilateral defense agreement and that Seoul should pay only for the direct basing upkeep of the U.S. presence in South Korea.
Given that Trump has come down on price before, he could compromise once more during negotiations that could last several months. But given its initial position, there is less chance that the United States will lower its demand enough to avoid tarnishing ties with South Korea. It is possible that the United States could reduce the price if South Korea agreed to renew its intelligence-sharing pact with Japan amid the East Asian neighbors' recent deteriorating ties, maintain a ban on Huawei technology, and/or agree to host U.S. intermediate-range missiles, but it is unclear whether Trump would view such issues as meaningful compromises.
The Upshot
The U.S.-South Korean relationship is a longstanding and important military alliance in the region. If Washington refuses to reduce its price for troop deployments, it could deal a significant blow to bilateral ties, especially as South Korea's government could hardly countenance the costs ahead of legislative elections in April 2020.
The request is symptomatic of two wider drives. For the United States, the price demand stems from the White House's push to renegotiate and potentially restructure its military commitments around the world, particularly with countries that have developed into wealthy states that can afford significant defensive outlays. For South Korea, the request amplifies a growing sense that the United States is untrustworthy, as well as a desire to become more self-reliant in security and pursue more independent policies, both of which could complicate Washington's regional strategies. Greater friction in the alliance would likely accelerate Seoul's move away from Washington to the extent that South Korea could even consider acquiring nuclear weapons in the long term — something that a number of former South Korean officials have already deemed a potential necessity.
