South Korea’s new president is fixing relations with America, Japan and China

Mr Lee’s most urgent task has been to land a deal for tariff relief with Donald Trump

SHIN WOO-SEOK is known for directing flashy music videos. His latest star-studded clip opens with G-Dragon, a K-pop heartthrob, marching through a traditional Korean restaurant, where he finds a football star, a movie director and a top DJ dining at the restaurant of a celebrity chef. Then comes an unusual turn: South Korea’s new president, Lee Jae Myung, makes a cameo as an air-traffic controller, helping guide planes to the runway. The slick video, commissioned to help promote the annual gathering of the Asia-Pacific Economic Co-operation (APEC) forum that South Korea hosted earlier this month, concludes with a message: “The world comes to Korea.”

Lee hosted Xi at a state summit and dinner after an Asia-Pacific leaders' forum in the South Korean city of Gyeongju, marking Xi's first visit to the U.S. ally in 11 years.(Reuters)

The president and his people intend the video to symbolise the country’s diplomatic re-emergence following a period of severe turbulence. Mr Lee won a snap election in June to replace Yoon Suk Yeol, who was impeached for declaring martial law late last year. He took office facing myriad challenges, from trade tensions with America to North Korea’s tightening ties with Russia and China. Mr Lee has proven an effective advocate for his country’s interests, but more turbulence lies ahead.

As leader, in opposition, of the left-wing Democratic Party (DP), Mr Lee dutifully hewed to foreign-policy positions traditionally identified with South Korea’s progressives, including relative openness to North Korea and a deep-seated wariness of Japan, the former imperial overlord. But as a presidential candidate he promised pragmatism. Mr Lee has largely carried this into office, working to improve relations with America and Japan—as well as with China. In keeping with DP orthodoxy, however, he has revived outreach to the North—so far to little avail.

Mr Lee’s most urgent task has been to land a deal for tariff relief with Donald Trump. South Korea and America signed a free-trade agreement in 2012. That did not stop the American president slapping a 25% duty on all goods from South Korea in April. Following a preliminary agreement at the end of July, Mr Trump agreed to lower the rate to 15% for many goods, but not for cars. That put South Korean carmakers at a disadvantage in their largest market to competitors from Japan and the EU, which managed to negotiate reductions to 15% for their car industries. One South Korean executive says: “They have been bleeding.” Hyundai Motor reported a 30% drop in operating profit in the third quarter, compared with a year earlier. Hundreds of South Korean engineers at a Hyundai battery plant in Georgia were swept up in an immigration raid in September, adding to the tensions.

When Mr Lee met Mr Trump on the margins of APEC, it was his best chance of sealing a better deal. Their final agreement had South Korea promising to invest $350bn in America, in exchange for tariffs on most of its goods—including cars—coming down to 15%. On the face of it, the package resembles Japan’s earlier $550bn pledge. While final details of the agreements have yet to be publicly released, South Korean negotiators say the version they secured contains several valuable differences. One is an annual cap of $20bn in cash investments by South Korea into the fund for projects in America, a move aimed at avoiding turbulence on South Korean currency markets. Another is making clear that the projects under consideration must be commercially viable ones, not just ones the Trump administration demands. (Japan hopes to control the choice of projects through a less explicit oversight mechanism.)

Mr Lee also managed to incorporate a second, security-focused part of the agreement. Officials say South Korea pledged to take more responsibility for its own security and to buy lots of high-end American weapons. In return, Mr Trump blessed Mr Lee’s desire to possess nuclear-powered submarines, a capability that South Korea has long sought but that America has long resisted allowing it to obtain.

What is more, the two countries apparently agreed to renegotiate a pact governing nuclear co-operation. South Korea wants the right to enrich and reprocess nuclear fuel, something to which America has objected in the past. This will make South Korea’s nuclear-power industry less dependent on imported fuel and help it reduce nuclear waste.

Renegotiating the pact also brings another—unspoken—benefit. It would be easier, should South Korea choose, to assemble a nuclear weapon. That is why proliferation-wary Americans have long opposed the pact’s revision. Mr Trump either did not understand the implications, or did not care. South Korea’s moves towards an insurance policy betray deep unease about the future of its alliance with America.

South Korea shares such unease with Japan, another jittery American ally. Yet under the last DP president, Moon Jae-in, who stepped down in 2022, relations between the neighbours went into a deep freeze over issues relating to their bitter colonial history; as opposition leader, Mr Lee even led a hunger strike in part to protest against Mr Yoon’s conciliatory stance toward Japan.

Yet President Lee’s pragmatism has also been on display in his relations with Japan, especially with Takaichi Sanae, its new right-wing prime minister. The two leaders had a chummy first summit during the APEC meeting. South Korean diplomats now speak of Japan as their best friend in the neighbourhood. Both face similar threats, not least from an unpredictable America. “There’s a saying: people with the same disease have sympathy toward each other—that’s the situation,” says Lee Sang-hyun of the Sejong Institute, a South Korean think-tank.

America’s rivalry with China has left South Korea with less room for manoeuvre in its relations with its giant neighbour and largest trading partner. “We are clearly in the Western camp,” says a South Korean official. China recently placed sanctions on South Korean shipbuilding firms involved in an effort to help America revive its shipbuilding industry. Yet Mr Lee wants to contain the fallout. The appearance of Xi Jinping at APEC, where he met Mr Trump to negotiate a truce in their trade war, marked the Chinese leader’s first official visit to South Korea for more than a decade. At Mr Lee’s meeting with Mr Xi the two smiled and bantered about mobile-phone security.

As Mr Lee sees it, not only is China a crucial economic partner, it will also play a key part in any potential dialogue with North Korea. Not everyone sees that as pragmatism. Andrei Lankov at Kookmin University in Seoul points out that Mr Lee’s seeking engagement with North Korea looks more like the traditional approach of the South Korean left (in its quest for engagement, the left has long been disinclined to criticise the North’s brutal regime). Mr Lee has encouraged Mr Trump to take the lead as peacemaker-in-chief in coaxing Kim Jong Un, the North Korean dictator, to the negotiating table. The overtures from both America and South Korea, however, appear to be going nowhere. Mr Kim, who is getting economic, diplomatic and even military support from both Russia and China, has made clear that he wants at least recognition of North Korea’s nuclear status and an end to talk of its denuclearisation as preconditions for returning to talks.

However well it went for Mr Lee, APEC was only a preview of the tests he will face during his presidential term. The details of his agreement with Mr Trump need to be nailed down. Differences over what was actually agreed have already emerged, including over where the nuclear-powered submarines are to be built. Implementing the investment pact will surely be a challenge. Meanwhile, conflicts over history between South Korea and Japan have a nasty habit of resurfacing. “What’s the resilience in the relationship when rainy days come?” asks the South Korean official. “Because we will have rainy days.”