U.S.-South Korea spat follows tensions over Seoul’s drift towards China, trade deal speedbumps

President Donald Trump’s decision to scale back participation in military exercises with South Korea did not come out of the blue, but rather follows his frustration about Seoul failing to follow through on investment promises and refusing to assist Washington in the Iran war. At the same time, South Korea’s government has sought to improve relations with China, America’s rival in Asia. 

South Korea’s current president, Lee Jae-myung, a member of the progressive Democratic Party of Korea, has made it a priority to both restart dialogue with North Korea but also sought to achieve a “full-scale restoration” of the relationship between China and South Korea, generating friction between Seoul and Washington. 

In addition, South Korea has been slow to follow through on its investment promises to the Trump administration which the country made during trade negotiations last year under threat of tariffs. Seoul promised Washington billions in investments in the U.S. in those talks, but the American president has expressed frustration since early this year that South Korea was not living up to the deal. 

Seoul rejects condemnation of Iran's attacks

President Trump is also frustrated by Seoul’s lack of assistance to the United States during the Iran war. “While somewhat unrelated, I recently asked the President of South Korea if they would like to join us in the Denuclearization of the Islamic Republic of Iran, and they said, ‘No thanks!’” Trump posted to Truth Social. 

Gordon Chang, author and conservative China hawk, said in an interview on Monday that President “Lee Jae-myung is a leftist” and “he’s moving very fast into the pro-China, pro-North Korea camps.” 

But, Chang argued that, given the dissatisfaction with Seoul, it is still not a good idea for the United States to pull back from the military exercises. “This is a separate issue with regard to the joint military exercises with South Korea,” he said in an interview with Fox News. “I don’t think there’s a justification for reducing the scale of these exercises …” 

Chang said that as North Korea continues to provoke its Southern neighbor as well as other U.S. allies in the region, it is important for the United States to demonstrate its military deterrent in such exercises. “At this point, we should be scaling up those exercises to create deterrence; we do not need one more miscalculation in North Asia.” 

South Korea’s presidential office, known as the Blue House, said that it hopes to continue cooperating with the United States after President Trump’s decision to pull back from the exercise. In a statement, Seoul said that it “hopes that the friendly relationship between the U.S. and North Korean leaders will lead to meaningful dialogue between the two countries, opening discussions aimed at advancing peace and stability on the Korean Peninsula,” Reuters reported.

Trump orders Pentagon to reduce participation in military exercises

President Trump announced on Monday that he had ordered Secretary of War Pete Hegseth to reduce the United States’ participation in the joint military exercises with South Korea that began on Monday, citing his “good relationship” with North Korean dictator Kim Jong Un. 

“Based on my very good relationship with Kim Jong Un, of North Korea, I am not happy with the fact that the United States has, long ago, agreed to participate in Joint Military Exercises with South Korea,” Trump posted to Truth Social. 

“These exercises are not only costly, with much of these costs paid for by the United States of America (as usual!), but send a signal that is totally inappropriate and hostile, to a Country that, as long as Donald J. Trump has been President, has been unthreatening and respectful. Therefore, and based on the fact that it is too late to cancel, I have instructed Secretary of War, Pete Hegseth, to substantially reduce the Joint Military Exercises!” he continued. 

Seoul’s drift toward China

Since the Korean president was sworn in last year in the wake of the impeachment of his predecessor, Lee Jae-myung has worked to improve relations with China. Former President Yoon Suk Yeol of the conservative People Power Party, had taken a hard line towards China that worsened tensions. 

In October 2025, Lee welcomed Chinese President Xi Jinping to South Korea for the Asia-Pacific Economic Cooperation summit where the pair of leaders met on the sidelines. Then, in January, Lee traveled to Beijing and said he wanted to open a “new phase” in South Korean-Chinese relations.

“This summit will be an important opportunity to make 2026 the first year of full-scale restoration of Korea-China relations,” Lee said. “I believe that efforts to develop the strategic cooperation and partnership between the two countries into an irreversible trend of the times will continue.” 

At the meeting, the two countries promised to work closely together to maintain dialogue with North Korea–a priority for Lee’s liberal government–but the main thrust of the agenda was economic. 

NBC News reported that Seoul and Beijing signed 15 agreements dealing with technology, intellectual property, and transportation cooperation while several companies from both countries inked their own deals. Lee also said that he wanted South Korea and China to cooperate on artificial intelligence. 

Stalled investments in the United States

While Seoul worked to expand economic cooperation with Beijing, President Trump’s administration was growing concerned that South Korea’s promises to invest in the United States were going unfulfilled. 

Later in January, just weeks after President Lee’s visit to China, Trump warned South Korea that it was not living up to the terms of a trade deal that it made with the United States the previous year. In October last year, South Korea agreed to invest $350 billion in the U.S. and purchase oil and gas from the United States "in vast quantities," in exchange for the U.S. lowering its tariff rates.

“Our Trade Deals are very important to America,” Trump said. “In each of these deals, we have acted swiftly to reduce our tariffs in line with the transaction agreed to. We, of course, expect our trading partners to do the same.”

The South Korean parliament did not approve the investment plan until June, opening the door for $350 billion in investments–$200 billion for direct investments in U.S. industries and $150 billion for shipbuilding projects. In August, South Korean shipbuilding giant Hanwha offered $1 billion to buy Austal USA, which builds ships and submarine parts for the U.S. Navy. It is unclear if this offer is in coordination with South Korea’s overall investment plan. 

However, The Korea Herald reported on Monday that South Korea wanted to begin unveiling projects at the end of August, but that there are last-minute issues between the U.S. and South Korea about the $200 billion portion of the pledge. 

“We had been considering announcing the projects around late August or early September, but various concrete, working-level issues have emerged in the final stage,” South Korean Industry Minister Kim Jung-kwan told reporters on Monday in Washington, D.C.