- Formal Japan-US-South Korea military cooperation will likely materialise in coming year, prompting harsh criticism from China and further missile tests from North Korea
- Trade relations between Seoul and Beijing will continue to deteriorate over near term, increasing operational challenges for South Korea firms
- Given potential backlash from neighbouring countries, government is unlikely to develop indigenous nuclear weapons despite widespread domestic support
- President Yoon Suk-yeol visits Washington and meets with his US counterpart Joe Biden. The US pledges to grant South Korea more insight into its nuclear planning through bilateral presidential consultations, in the event of a North Korean nuclear attack. (26 April)
- International media outlets report the US has requested that South Korea urge its chip manufacturers not to fill any market gap in China should Beijing ban Micron, a US firm. (23 April)
- Yoon says in an exclusive interview with Reuters that Taiwan is a “global issue” and that he opposes “attempts to change the status quo by force”. His remarks have triggered criticism from the Chinese foreign ministry. (18 April
Yoon’s trip is the first state visit to the US by a South Korean leader since 2011 and has focused heavily on deterring North Korean nuclear aggression. This aligns with our previous analysis that Seoul will increase efforts to strengthen defence cooperation with Washington and follow the latter’s foreign policy framework to ensure regional stability. Coupled with the normalisation of ties with Japan, Yoon will push the formalisation of a trilateral security framework with Tokyo and Washington in the coming year. This will also increase the likelihood of South Korea joining the Quadrilateral Security Dialogue bloc, which includes the US, Australia, India, and Japan, in the longer term.
Such moves will almost certainly draw harsh criticism and trade retaliations from Beijing. Given South Korea’s economic reliance on China, Yoon had largely maintained a cautious approach. For example, he avoided explicitly mentioning Beijing as a security challenge in his Indo-Pacific strategy last December. However, his recent remarks reflect his increasing openness to align with the US strategic interests and risk provoking China. This will see the diplomatic and economic ties between Seoul and Beijing further deteriorate in the coming months, raising operational challenges for South Korean firms in China.
Resultantly, South Korea will deepen trade and technology engagement with the US to offset potential losses from the Chinese market and boost economic recovery. Over 100 business leaders from South Korea’s largest conglomerates – including technology giants Samsung and LG, as well as chipmaker SK Hynix – accompanied Yoon to the US. The role of South Korean technology manufacturers in global supply chains remains crucial to the US’s long-term objectives to restrict China’s access to cutting-edge technologies. This will see Seoul continue to leverage its expertise in advanced technologies and semiconductor production to secure foreign investment over the coming years.
Implications for Business
Military: In response to North Korea’s nuclear threats and frequent missile tests over the past two years, latest poll results show that 88% of the South Korean public have unfavourable views of Pyongyang and more than half of them support the development of nuclear weapons capability. However, such initiatives will trigger serious retaliation from Beijing and Pyongyang. Resultantly, plans for nuclear development will not receive support from Washington. This suggests a low likelihood that Yoon will pursue the deployment of US tactical nuclear weapons to the Korean peninsula or pursue indigenous development in the coming years.
Political stability: As expected, Yoon’s recent state visits and diplomatic achievements do not appeal to the South Korean public. His approval ratings have continued to decline since the start of 2023, likely because of the weak economy and disapproval of his rapprochement with Japan and resolution over its historic use of South Korean forced labour. Without a strong economic rebound, Yoon’s public support will remain low in the near term, sustaining the likelihood of him being ousted before the legislative election next April.