How South Korea’s billions will upgrade Trump’s war machine

Dae-Han Song

In a flagrant disregard for international law and national sovereignty, the Trump administration invaded and kidnapped Venezuela’s President Nicolas Maduro and First Lady Cilia Flores.

Rather than being an isolated event, the increasing bravado of and remarks from US President Donald Trump open the terrifying possibility that, if not opposed, Trump’s war machine will proliferate its aggressions, with next possible targets being Cuba, Mexico and Colombia or Greenland.

US hyper-imperialism is dividing and unravelling the world at a time when we should be coming together to address our most existential crises. 

Key in this strategy for military domination are “AI, quantum computing, and autonomous systems, plus the energy necessary to fuel” them.

South Korea’s pledge of $350bn in factories, manufacturing knowhow, and technology in these sectors will strengthen Trump’s war machine.

Opposing this Memorandum of Understanding (MoU) is one front in resisting the Trump administration’s hyper-imperialism. 

Robbing the mouse

Since his “Liberation Day”, Trump’s tariff war has extorted pledges for trillions of dollars from the rest of the world, accusing it of taking advantage of the US and creating the US trade deficit.

This narrative conveniently ignores the ultra-rich in the US, whose trillion-dollar companies were built on these global supply chains. More specifically, over 70% of the US S&P 500 companies rely on global supply chains (as noted by Covid’s impact on them).

Most spectacularly, Apple grew into a $3.8tn company by selling products manufactured by the rest of the world. If it were a country, Apple would be the seventh largest.

Amazon grew into a $2.6tn company (greater than Italy’s gross domestic product, the eighth globally) by trading mostly (71%) goods manufactured in China.

If countries, nonetheless, developed and industrialised by producing US goods, they did so despite earning pennies on the dollar. For instance, China earned two pennies for every dollar from the sale of an iPhone; Apple earned over 50 cents.

The bulk of the US trade balance went not into the coffers of countries around the world but into those of the ultra-rich in the US, who took the lion’s share of the wealth.

Now, Trump is gunning for the mouse’s share.

Much has been made of the fact that the EU’s $600bn investment pledge lacks enforceability, with most investment happening on its own through the markets.

Yet, the enforcement mechanism for Japan’s and South Korea’s investment pledges of $550bn (42% of Japan’s foreign reserves) and $350bn (83% of South Korea’s foreign reserves) is far more direct and brutal. Both countries must invest in Trump’s projects or risk reciprocal tariffs. More specifically, the Trump administration will propose investments in strategic sectors.

If they refuse, Trump can simply impose the reciprocal tariffs and, despite South Korea’s bragging that it has got a better deal than Japan (through assurances that the US would consider the destabilising effects of investments and would limit investments to $20bn a year), it still has the same unequal profit-sharing scheme: South Korean and Japanese investors would bring all their capital and manufacturing knowhow into a project, but contrary to the principles of the market, they would still hand over 50% and, once the investment is recovered, 90% of the project’s profits to the US. In effect, the US gets 50% and then 90% of profits without putting a penny of its own money.

Furthermore, it’s not yet clear what impact the funnelling out of such massive investments from South Korea and Japan will have on their people. By building factories for and training future competitors, it is hard not to rule out a hollowing out of each country’s industrial base and a dulling of their competitive advantages. 

Upgrading the war machine

Worst of all, these investments do not build a world centred on the needs and interests of people in the US or of the world nor make the world safer or more sustainable.

On the contrary, they help Trump preserve and advance “cutting-edge military use technology and dual-use technology”  to intimidate, bully and invade other countries.

More specifically, South Korea will be investing $150bn to expand the US capacity (which is suffering from backlogged orders) to build warships and potentially nuclear-powered submarines.

Additionally, South Korea will invest up to $20bn a year for 10 years on sectors Trump’s National Security Strategy has identified as deciding “the future of military power“. Semiconductor factories would create the chips for the data centres that will allow the US to dominate AI, which is becoming central to waging war. To power these electricity-hungry data centres, South Korea will provide the nuclear power plants.

Finally, South Korea will be providing smelting technology and knowhow for refining critical minerals for defence.

Not set in stone

While Trump has managed to extract many concessions through his tariff war, the MoUs that are reached are not set in stone.

Not only is the legality of Trump’s tariffs (the extortion mechanism) being deliberated upon by the Supreme Court, the MoUs are not legally binding. In other words, their enforceability will be determined by a struggle between Trump’s tariff pressure and a government – and more importantly, its people’s – willingness to resist Trump’s extortion and war machine. 

South Korean progressive political parties and civil society created the Organizing Committee of the International People’s Action Against Trump’s 1st Year Anniversary to resist Trump’s aggressions.

Jeong-eun Hwang of the Organizing Committee explains: “The US doesn’t need more submarines, warships, and AI to get better at intimidating, bullying, and destroying the world. Opposing South Korea’s $350bn investment offers one specific way to resist Trump.” – Globetrotter

Dae-Han Song is a part of the International Strategy Center and the No Cold War collective. He is also an associate at the Korea Policy Institute.

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