Trump’s Mistaken ‘Art of the Deal’ Squeezes South Korea

No one has transformed his image in South Korea as dramatically as US President Donald Trump. He was regarded as the epitome of a madman from his inauguration in January 2017 to early 2018. He knocked on the doors of a Korean Armageddon, threatening to unleash “fire and fury” on North Korea and to “totally destroy” the country, even referring explicitly to his “nuclear button.” These were instruments of fear mongering. He displayed a classic version of coercive diplomacy: if you fear me, do as I say.

South Korea was on the receiving end of this. The Moon Jae-in administration had to worry about avoiding Trump’s drastic choices. The US president used this pressure. He attempted to maximize weapons sales and occupy the high ground in the KORUS FTA talks and the Security Consultative Meetings through fear mongering.

But if Trump was seen as a madman, he transformed himself into the “peacemaker of the Korean Peninsula” starting on March 2018. He agreed to hold a summit with North Korean Chairman Kim Jong Un and subsequently met with him three times. He recently mentioned that he is “[looking] forward to meeting with Chairman Kim” again.

As he successfully changed his image, South Koreans began to view him favorably. The Pew Research Center reported on October 1, 2018 that Trump’s approval rating in South Korea was 44 percent. This is second only to Israel, where Trump is viewed highly favorably among major US allies. Trump’s rating was lower with traditional allies; 32 percent in Australia, 30 percent in Japan, 28 percent in the UK, 25 percent in Canada, 10 percent in Germany, and 9 percent in France.

But the president’s mercantile mindset has not changed. He used fear to get what he wanted. Now that he has changed his image to that of a peacemaker, he wants to make money out of that. It is as if he sees South Korea as an ATM for the US.

The US media seem to view the situation in a similar way. The Wall Street Journal said on March 14 that “an alliance isn’t a Manhattan real-estate deal” and that “President Trump treats the US military like a mercenary outfit.” However, Trump’s remarks are only getting rougher. On August 9, 2019, at a fundraiser for his presidential campaign held in New York, he mentioned that “[it] was easier to get a billion dollars from South Korea than to get US$114.13 from a rent-controlled apartment in Brooklyn,” while telling a story about collecting rent with his father when he was young.

Why Trump’s Demands are Absurd and Unfair

Trump has called South Korea a “Free Rider,” claiming falsely that the US is paying for the entire cost of US Armed Forces in Korea. He pledged that he would seek a groundbreaking increase in the share that allies pay for their defense costs, including that of South Korea. He was obstinate, even though he would have learned that South Korea is already shouldering a considerable amount. He pushed the Moon administration and received KRW1.389 trillion in 2019 for defense costs from South Korea, an 8.2 percent increase from 2018.

The Special Measures Agreement between the US and South Korea for 2019 lasted for just a year. He is now talking about an absurd increase in 2020. During a political rally in Florida in early May, Trump described his conversation with a general where he was supposedly told that the US spends US$5 billion on “defending very dangerous territory [but they] pay us $500 million, [and] we lose US$4.5 billion to defend a country that’s rich as hell, and probably doesn’t like us too much.” He did not say South Korea, but he left enough breadcrumbs for anyone to figure out to whom he was referring.

As US Secretary of Defense Mark Esper prepared to visit South Korea on August 9 and 10, the media reported that the US will ask for US$5 billion from South Korea. They reported that Trump mentioned that figure in a dialogue that was closed to the public. Earlier in March, the media reported that Trump is planning to ask for “expense of stationing plus 50,” meaning that he would be asking for a 50 percent premium in addition to the full expense of stationing US troops in South Korea. In this case, the bill would be US$3 billion.

Regardless of the exact amount, Trump’s demand to increase South Korea’s share of defense costs is illogical and unfair. First, sharing defense costs itself is exceptional. There was no such thing as “shared defense costs” in the US-South Korea alliance in the past. Article Five of the Status of Forces Agreement (SOFA) states that the US bears the cost of maintaining US Armed Forces in Korea while South Korea provides the necessary facilities and sites. However, the US demanded that South Korea share the burden from 1990 as an exception and special action. This amounted to KRW107.3 billion in 1991 and grew tenfold in 2019 to KRW1.389 trillion, and only includes direct payments.

If we count indirect costs, such as rent and tax relief, South Korea bears more than 70 percent of the total budget necessary for US Armed Forces in Korea. The number of US forces during this period decreased from around 44,000 to around 28,500.

South Korea is bearing much more in terms of costs compared to Japan. According to the Korea Institute for Defense Analysis (KIDA), South Korea paid KRW5.4563 trillion in 2015 as direct and indirect costs for the US Armed Forces in Korea. Japan paid KRW6.7757 trillion for US Forces Japan. While the actual amount appears to suggest that Japan paid more, this is not the case when we consider the number of troops. In South Korea, 28,034 personnel were stationed with the US Armed Forces in Korea in 2015, while 62,108 were stationed with US Forces Japan.

South Korea is paying double what Japan is paying per US military personnel. They are also paying 2.5 times more in terms of percentage of gross domestic product (GDP). Considering this, Trump should thank South Korea. Instead, he insults the country and pressures it to increase its share to an absurd amount.

However, the US has not been able to use all of what South Korea has paid. There are two reasons for this. One is excessively priced “unexecuted amounts” compared to usage. Second is “disused amounts” that were given but were not spent. Combined, they are thought to amount to hundreds of billions of won. Given this situation, common sense suggests that South Korea’s burden of defense costs should decrease rather than increase, and the leftover money should be returned to South Korea’s budget.

However, previous US administrations have instead deposited the leftover money to banks and made tens of billions of won in interest. On top of that, the Trump administration is pressuring South Korea to increase its payments.

We should also note the issue of redirecting South Korea’s share of defense costs. The project to expand Camp Humphreys, located near Pyeongtaek, is a direct example. In 2004, South Korea and the US government agreed to expand Camp Humphreys and relocate the Yongsan Garrison and the 2nd Infantry Division. The cost for this was to be divided in half. However, the US fulfilled its portion by redirecting Korea’s share of defense costs. As a result, the burden for the expansion project in Pyeongtaek was 93 percent carried by South Korea and 7 percent by the US.

This itself is also unfair, but there is more. The Camp Humphreys expansion came to an end last year, eliminating the reason for increasing South Korea’s share of defense costs. However, US redirection of South Korea’s share did not stop here. Instead, 95.4 billion won of the share in defense costs provided by South Korea from 2014 to 2018 was identified as having been used for equipment maintenance of US Forces Japan.

US redirection of defense costs may happen again in the future. As an example, in 2017, the commander of US Armed Forces in Korea said that the Korean share of defense costs may be redirected to improve the THAAD anti-missile deployment site in Seongju, Gyeongsangbuk province. This contradicts the agreement that the US will bear the deployment and operational and maintenance costs for THAAD while South Korea would provide the site.

Also, since there was not enough reason for South Korea to increase its share of defense costs, the US created the new category of “operational support costs” and has requested South Korea to take on strategic asset development costs. As the US withdraws from the Intermediate-Range Nuclear Forces (INF) Treaty, it is considering deploying missiles in South Korea. If missiles are deployed, there is a possibility for the shared defense costs to be used for facilities’ expenses. It is clear that if anyone of these possibilities is realized, South Korea will be in a difficult situation.

Trump has argued that US armed forces in Korea exist just for South Korea and has made remarks that they can be withdrawn if need be. However, US armed forces in Korea exist not for one side’s interest but for the benefit of both countries. The Trump position that “we are protecting you so you should pay more money” deeply insults South Koreans and is fostering negative perspectives towards US Armed Forces in Korea. The motto for the US-Korea alliance is “we go together.” As long as Trump uses the alliance as a tool to increase South Korea’s share of defense costs and to sell arms to Seoul, developing a healthy alliance will become more difficult.

How Should the Moon Administration Respond?

How, then, should the Moon administration deal with Trump, the madman and the peacemaker? Specifically, how should it respond to the demand to increase South Korea’s share of defense costs? First, it needs to deviate from the position of fearing and depending on the US. Fear of Trump is what Trump wants the most, and it is a powerful method for taming South Korea.

Simultaneously, it is also dangerous to be overconfident about his good faith regarding peace on the Korean Peninsula. His Korean Peninsula policy adheres to domestic political needs and financial ambition rather than a firm belief in peace.

Selective alteration of the South Korea-US alliance should be fully pursued. Here, “selective alteration” means to search for change in the relationship from the perspective of sovereignty and peace on the Korean Peninsula while maintaining the South Korea-US alliance. Specifically, there is a need to consider rapidly recovering wartime operational control, terminating South Korea-US joint military exercises, withdrawing the deployment of the THAAD anti-missile system, decreasing the number of US Armed Forces in Korea, and reforming the defense cost-sharing structure. The four are all closely related.

First, there is a need to quickly complete the transfer of wartime operational control back to South Korea. This has been discussed since the early 1990s and agreement has been reached from time to time, yet it has been repeatedly delayed for almost 30 years. However, during that time, South Korea’s national power, including military power, has increased dramatically. As the US Armed Forces in Korea acknowledged, South Korean officers are very competent. The Moon administration should recover wartime operational control by 2020, or 2021 at the latest. By having South Korea-led security capabilities, the Trump argument that because the US protects South Korea, it should pay more money will have no ground to stand on.

Trump has been framing the THAAD deployment and South Korea-US joint military exercises as the basis for requesting an increase in South Korea’s share of defense costs. He has said that because $1 billion was spent to create THAAD, South Korea should pay that amount or THAAD should be removed from the country. He labeled South Korea-US joint military exercises as “provocative war games” and as “ridiculous and expensive.”

The Moon administration should use such remarks by Trump as an opportunity for selective alteration in the South Korea-US relationship. Rather than feeling pressure from Trump’s remarks, Seoul should suggest a withdrawal of THAAD and a halt to South Korea-US joint military exercises. Also, reducing US Armed Forces in Korea should be discussed. These measures would not only be effective in dealing with requests for South Korea to increase its share of defense costs share, but they would also contribute to the Korean Peninsula peace process.

The pending issue of South Korea’s share of defense costs should be faced squarely. There are three things to address specifically. First, it should be explained in detail how US demands to alter cost-sharing are illogical and unfair. Second, if US pressure increases, South Korea should not give in. If an agreement is refused, this year’s cost-sharing will be automatically implemented. Third, the current method of counting contributions by the total amount paid should be altered to one counting requirements fulfilled. Through this, the US will no longer be able to arbitrarily transfer South Korea’s share of the budget to other places, such as Japan.

Wooksik Cheong is CEO of the Peace Network in Seoul. He also served as a member of the advisory board for the unification, foreign affairs, and security division of the Roh Moo-hyun administration’s presidential transition committee; Chairman of the Operation Committee of the Civil Peace Forum; and as a member of Seoul city’s Inter-Korean Cooperation Committee. The views expressed are his own. Reprinted with permission from the East Asia Foundation, a Seoul-based think tank.