As US President Donald Trump retaliates against Europe on both security and trade fronts for its lack of cooperation in the war against Iran, speculation is growing that similar measures could be taken against other allies, including South Korea. Trump had demanded that allies deploy troops to the Strait of Hormuz against Iran, but most allies except the United Arab Emirates declined.
◇ Two-Track Retaliation Hits Europe
The US Department of Defense (Department of War) confirmed to Yonhap News on Monday (local time) that it will cut approximately 5,000 US troops stationed in Germany under the direction of Secretary Pete Hegseth. This represents 14% of the 35,000 to 36,000 US troops in Germany, with the goal of completing the reduction within six to 12 months.
On the same day, Trump announced that tariffs on European Union passenger cars and trucks would be raised to 25% starting next week. The move restores tariffs to pre-agreement levels, reversing the 15% rate set under the trade deal reached in July last year. Trump claimed that "the EU is not abiding by the agreement."
The trigger for the security retaliation was German Chancellor Friedrich Merz. When Merz criticized that "the United States is being humiliated by Iran," Trump responded that he did not know "what he is talking about" and pulled out the troop reduction card. Trump also left open the possibility of reducing US troops stationed in Italy and Spain.
◇ Trump Previously Warned Korea of 25% Tariff Restoration
Trump has repeatedly referenced the security contribution of US Forces Korea whenever he expressed disappointment over the Iran war. While South Korea and Japan indicated they would participate in reopening the Strait of Hormuz, they have taken a cautious stance on the troop deployment request, effectively declining. South Korea's Ministry of National Defense drew a line on Oct. 30, stating that "there is absolutely no discussion about reducing US Forces Korea."
However, the atmosphere is different on the tariff front. In January, Trump also threatened to restore auto product tariffs to 25%, citing delays in implementing investments in the United States. In July and October last year, the South Korean and US governments agreed on the "Korea-US Strategic Trade and Investment Agreement," which lowered reciprocal tariffs and auto tariffs on South Korea from 25% to 15% in exchange for South Korea's commitment to invest $350 billion in the United States.
However, on January 26 (local time), Trump abruptly declared that reciprocal tariffs on South Korea and tariffs on Korean-made automobiles would be raised back to 25%, the pre-trade-agreement level. The reason cited was that South Korea's National Assembly has yet to approve the Korea-US trade agreement reached last year.
That was before the Iran war, but the episode suggested that the tariff agreement is a card that can be played at any time.
If the tariff restoration materializes, the Korean auto industry will take a direct hit. Last year, auto exports to the United States reached $34.7 billion, accounting for about 30% of total exports to the country. Based on existing analyses by the National Assembly Budget Office and the Korea Institute for Industrial Economics and Trade, if the United States imposes a 25% tariff on Korean-made automobiles, exports to the US could decline by 15% to 25%. Applying this assumption, conservative estimates suggest annual export losses of around $5 billion, potentially reaching nearly $8 billion.
◇ Korea in a Weaker Position Than Japan
The sense that US-Korea relations are showing more strain than US-Japan relations is also a burden for Seoul. Disputes over US restrictions on intelligence sharing regarding North Korea and differences between the two countries over the Coupang personal data leak incident have surfaced.
Compared with Japan, South Korea's position is even narrower. South Korea has no constitutional restrictions on overseas troop deployments, weakening its grounds for refusal. In contrast, Japan has moved ahead in implementing the trade agreement by announcing its first investment destination in the United States.
However, some analysts argue that excessive pressure on South Korea ahead of the US-China summit could be a misstep.
