Trump Remarks on Trade, Missile Defense, Sow Doubt in South Korea

U.S. President Donald Trump raised new doubts in South Korea about two pillars of bilateral ties by saying he wants to renegotiate a free-trade deal and have Seoul pay for an American missile-defense system intended to shield the country against any North Korean attack.

Mr. Trump, in remarks to Reuters published late on Thursday, said for the first time that South Korea should pay for Terminal High-Altitude Air Defense, or Thaad, a missile-defense system that is a key campaign issue in the May 9 presidential election here. He also said that the nations' free-trade deal should either be renegotiated or abrogated.

The Thaad remarks also followed what appeared to be a shift in tone from the Trump administration over its posture towards North Korea. The administration said Thursday it was not seeking to overthrow North Korean leader Kim Jong Un over his nuclear weapons program and would consider holding talks, if Pyongyang pursued "the right agenda."

However, the same day, he told Reuters that a "major, major conflict with North Korea" was possible if diplomacy failed.

The Lockheed Martin Corp.-built Thaad system, which costs about $1 billion for the one battery that will be installed, is set to be paid for and owned by the U.S., which this week began installing it.

A South Korean defense ministry spokesman declined Friday to comment on Mr. Trump's remarks. But he pointed out that South Korean was supplying the land and the basic infrastructure for the Thaad system.

The comments surprised South Korean officials after top Trump administration officials recently reiterated the administration's intent to deploy Thaad, which the two countries agreed to in July under the Obama administration.

"A lot of people here thought that the U.S. was deploying Thaad for the sake of the alliance, but if we have to pay for it, people will start doubting that," said Choi Jong-kun, an associate professor of political science at Yonsei University who has given foreign policy advice to Mr. Moon's campaign.

"'How can an ally do that to another ally?'" Mr. Choi said, cautioning that he had yet to read a transcript of Mr. Trump's remarks. But Mr. Choi added that, if South Korea were to pay for Thaad, it would have to go through the country's National Assembly, as Mr. Moon has proposed during the campaign.

In South Korea, the deployment has become a political football. Moon Jae-in, the leading candidate to become South Korea's next president, has said that Thaad should be delayed until the next administration. In recent weeks, as North Korea has tested more missiles and ramped up its rhetoric to match Washington's, Mr. Moon has softened his tone on Thaad.

But the U.S. military's decision to begin installing the Thaad battery--in the middle of the night--became headline news in South Korea, inflaming tensions from supporters of Mr. Moon who accused the U.S. and trying to ram through an unpopular missile-defense system.

Any legislature debate would likely entail a heated fight among lawmakers about the appropriateness of installing Thaad, and raise larger questions about the benefits of the U.S.-South Korea alliance. The South Korean conservatives who would traditionally be expected to back Thaad are in disarray following the impeachment and removal from office last month of former President Park Geun-hye.

On trade, Mr. Trump's remarks came after a presidential campaign in which he decried the five-year-old Korea-U.S. Free Trade Agreement as unfair.

Mr. Pence appeared to echo those remarks during a visit to Seoul earlier this month, sparking further concerns about the U.S. relationship.

"Despite the strong economic ties between the United States and South Korea, we have to be honest about where our trade relationship is falling short," Mr. Pence said, adding that he would work with South Korea's business community "as we reform Korus in the days ahead."

A senior trade ministry official said the South Korean government hasn't received any official offer from the Trump administration to renegotiate or terminate the pact.

Kwanwoo Jun contributed to this article.

Write to Jonathan Cheng at jonathan.cheng@wsj.com

(END) Dow Jones Newswires

April 28, 2017 00:30 ET (04:30 GMT)