The economic relationship between the United States and the Republic of Korea (ROK) is entering a volatile phase. A recent analysis by the Brookings Institution explores how a U.S. Supreme Court ruling on the International Emergency Economic Powers Act (IEEPA) has shifted the landscape. Although the court struck down specific tariffs, the future for Korean businesses remains complex and uncertain.
Currently, the South Korean government faces a strategic dilemma. Despite the court’s ruling, Seoul is choosing a cautious path. Experts suggest that President Lee Jae Myung may prefer to keep existing investment commitments rather than risk a new trade war. Since Washington can still use other legal tools, such as Section 301, South Korea must balance its domestic interests with the need to avoid further sanctions.
Economic security is also a major concern due to China’s “weaponization” of trade. This situation directly impacts the semiconductor industry. While the United States restricts high-end technology exports, China controls the supply of critical minerals. Consequently, Seoul is actively seeking “de-risking” coalitions. These alliances aim to protect South Korea’s industrial core from the ongoing competition between the two superpowers.
Finally, there is a significant risk in potential negotiations between Washington and Beijing. A bilateral deal between Trump and Xi Jinping might only benefit American companies. In that scenario, South Korea could face Chinese economic coercion without sufficient international support. Therefore, the stability of the alliance will depend on a trade policy that prioritizes long-term cooperation over transactional gains.
Reference
Ahn, D., Cha, V., & Yeo, A. (2026, March 6). Navigating uncertainty in US-ROK economic ties. Brookings Institution. https://www.brookings.edu/articles/navigating-uncertainty-in-us-rok-economic-ties/