The possibility of renegotiating the defense cost-sharing agreement for U.S. forces in Korea has been raised as a card to lower the tariff rates imposed by the United States on Korea. This comes as U.S. President Donald Trump has referred to the defense cost-sharing agreement made by the previous Biden administration with the Korean government as a mistake and has expressed his intention to correct it. The government reiterated its existing position of using the adjustment of tariff rates as a card for shipbuilding, liquefied natural gas (LNG), and trade balance, while also not dismissing the possibility of renegotiating the defense cost-sharing agreement, seeming to leave some room for this.
A senior official in the Prime Minister's Office met with reporters on the 9th to explain the results of the U.S.-Korea presidential phone call that took place the night before, noting, "President Trump has the perception that the policies he established during his first term (2017-2021) were distorted during former President Joe Biden's term."
The previous Biden administration signed the 12th Special Measures Agreement (SMA) on defense cost sharing with the Korean government in October last year. This agreement is set to be applied for five years starting this year. The contribution for this year is 1.5192 trillion won, and it will increase by the consumer price index (CPI) inflation rate starting next year.
The senior official noted, "The factual basis regarding the defense cost sharing should be assessed during government-to-government dialogue." This issue was also addressed as an agenda item during the phone call the night before, according to the official. "While there was no talk of defense costs in the press release, there was mention of the U.S.-Korea military alliance, and that aspect included discussions about defense costs," he explained.
However, the official refrained from commenting on the specifics of a potential defense cost increase. The senior official stated, "We cannot comment on that for now," adding, "Overall factors including shipbuilding, LNG, and trade balance will form a package for the tariff negotiations." He further noted that they will not discuss just the defense cost issue in isolation. Reducing the trade surplus with the U.S. through cooperation in shipbuilding and purchasing U.S. LNG is considered a priority negotiation card.
Currently, the government identifies managing trade risks as the top diplomatic priority with the United States. Hong Gi-seon, the Director of the National Policy Coordination Office, said, "The current government's top priority is managing trade-related risks," and added, "We are observing how the restructuring of the international economic order will unfold in response to this."
There are optimistic observations within the government that the presidential phone call held the day before will have a positive impact on future trade negotiations. Director Bang noted, "During the call, an acting authority emphasized that the U.S. and Korea can be win-win, reliable partners," and stressed, "We will do our best to ensure that we do not face unfavorable measures compared to other countries in future trade negotiations."