South Korea is balking at a Trump administration demand for sharply higher payments to defray the cost of basing U.S. forces on its territory, raising fears that President Trump might threaten an abrupt troop drawdown at a time of sensitive diplomacy on the Korean peninsula.
U.S. negotiators have sought a 50% increase in Seoul’s annual payment, which last year was approximately $830 million, or about half of the estimated cost of hosting 28,500 U.S. troops, according to two U.S. officials familiar with the discussions.
The hard-line U.S. stance reflects Trump’s view that U.S. allies have taken advantage of American military protection for decades — a view bitterly resented by many South Korean officials, who say they already pay more to the U.S. than almost every other American ally except Japan.
Talks that began in March aimed at reaching a five-year funding agreement were suspended after negotiators failed to reach a deal by the end of 2018, when the last agreement expired.
South Korea, which initially called for adjusting annual payments only to account for inflation, is expected to make a counteroffer this month, but it is unlikely to satisfy the White House, U.S. officials said.
“The Koreans want to keep the status quo,” said one U.S. official who discussed the deliberations in return for anonymity. “But the president had made clear, not just to Korea but to other allies, that the status quo won’t do.”
The standoff is straining the long-standing alliance at a time when Trump is planning a second summit with North Korean leader Kim Jong Un to renew the U.S. push for elimination of Pyongyang’s nuclear arsenal, and South Korean President Moon Jae-in is pursuing his own rapprochement with Kim.
"If it was reasonable, we'd go along," said Song Young-gil, a member of the National Assembly. "But the Trumpian way of unilaterally pushing for double, accusing us of free riding — we can't cave to that ... Whether it's Korean money or American money, it's taxpayer funds."
Song, who belongs to the same party as President Moon and is pro-engagement with North Korea, said he believed threats to remove U.S. troops was a negotiating tactic and would not come to pass given America’s broader strategic interests in northeast Asia.
Bruce Klingner, a former CIA analyst on Asia now at the Heritage Foundation, a Washington think tank, called the dispute “worrisome.”
“President Trump could again threaten to reduce troops, either as a negotiating tactic or to fulfill his campaign promise that Seoul has to pay 100% of U.S. troop costs or he would remove them,” Klingner said. “Conversely, President Moon could insist he won’t pay any higher reimbursement costs even if it means fewer U.S. forces.”
Either scenario could lead to “a premature reduction of U.S. forces in South Korea,” he added.
Trump’s ability to withdraw troops is limited, however. Congress last year passed a law barring the Pentagon from reducing troop levels in Korea below 22,000 unless he certifies to Congress that doing so is in U.S. national security interest.
Working level negotiators are considering various ideas to break the impasse, including having South Korea pay a portion of the U.S. cost of joint military training exercises, or to help defray costs of deploying U.S. bombers, warships, missile defense batteries and other military assets when tensions with North Korea are high, according to one of the U.S. officials.
A commitment by Seoul to pick up some of those costs could help Trump claim that he succeeded in forcing a key ally to pay more for the cost of U.S. military protection.
But major U.S.-South Korean military drills have been suspended since June, when Trump abruptly stopped them after his first summit with Kim in Singapore. In addition, the cost of such exercises is tiny compared with the bill South Korea pays every year for hosting U.S. troops.
The last funding agreement, signed in 2014, increased Seoul's contribution to more than $830 million a year. That’s about half the annual cost of keeping 28,500 U.S. troops in South Korea, not counting salaries and other personnel costs the Defense Department pays no matter where the troops are posted.
The money doesn't go to Washington, however. It's used to pay salaries of Koreans working on U.S. bases in South Korea, or is in the form of non-cash contributions of services and construction at U.S. installations there.
South Korea also is funding more than 90% of a $10.8-billion construction project that will allow U.S. troops to move from bases near Seoul and the Demilitarized Zone along the border with North Korea to new installations farther south.
Song, the South Korean legislator, said such favorable terms ensured that Trump would not pull out in the end.
"The U.S. will never give up a base they're keeping under these great terms," he said. "They won't be able to give it up."
Song said he viewed the haggling over cost-sharing to be a practical matter that wouldn't impact the U.S.-South Korean alliance.
Many conservatives in South Korea, on the other hand, fret that the stalled talks are signs of a fraying relationship.
Park Hwee-rhak, a Kookmin University professor who has researched military cost-sharing agreements, said the dispute was "threatening the foundation of the alliance."
He said South Korea could easily pay the increase given that its defense budget tops $42 billion this year.
Park said he believes Trump is seriously considering removing the U.S. troops in Korea while Moon is forced to cater to a political base that includes student activists who have historically opposed the U.S. military presence in Korea.
In a news conference last week, Moon said he believes Kim, North Korea’s leader, understands that the presence of U.S. troops on the Korean peninsula is not directly tied to whether North Korea gives up its nuclear arsenal.
“U.S. troops in Korea, or strategic assets the U.S. has in Guam or Japan, these don’t exist only in relation to North Korea but for the overall security and peace of Northeast Asia,” Moon said. “My perspective is that there isn’t a high possibility they will be used as a condition in the denuclearization talks between the U.S. and North Korea.”
Mike Bosack, who as a U.S. Air Force captain worked on cost-sharing negotiations with Japan between 2014 and 2016, cautioned that the Trump administration was jeopardizing its alliance with South Korea.
Bosack said the brinkmanship would benefit North Korea by potentially making the U.S. military less popular in South Korea and driving a wedge between Washington and Seoul.
"If the two allies are not in lock step, they could undermine each other or rush into agreements with the Kim regime that have negative long term outcomes," he wrote in an email. "North Korea would be foolish not to exploit this seam."