South Korea - Japan relations

Ichiro Suzuki

Prime Minister Sanae Takaichi visited Seoul in May. This was the third time that she met South Korean President Lee Jae-Myung since she became PM in October 2026. President Lee has been in office since a year ago. He belongs to the center-left Democratic Party of Korea. When a center-left party rules Choeong Wa Dae, or the Blue House, the bilateral relationship has been often rocky because the party’s base tends to press the president to stand tough on Japan for its history. Sanae Takaichi is a staunch conservative in the conservative Liberal Democratic Party, and this doesn’t bode well. The two people at the helm of the two countries could in theory provide a perfect recipe for thorny bilateral relationship. 

As it turned out, however, they are getting along very well. Their first encounter was in Geyongju, South Korea at the end of October 2025 at APEC meeting, only a few weeks after Takaichi rose to the helm. A belief meeting went well, and Takaichi invited Lee to Japan. In January 2026, Lee visited the ancient capital of Nara, where Takaichi grew up. For two days they discussed economic security issues, and at the end of the two days, they beat drums together. Takaichi was a drummer for a rock band when she was a student. It looked they had a good, relaxing time. 

Surprisingly smooth relationship between the two is essentially a product of geopolitical developments in the 2020s. The Cold War framework that ruled the world since the end of WWII was brought to its end completely in recent years. Today, the long lasting South Korea - Japan acrimony might look a luxury that was allowed to be indulged only in the old framework, which protected the two countries from communism and other threats. Under Donald Trump’s second administration, the United States has become not as reliable ally as what it used to be, in Europe or in Asia. Especially in Europe, the White House shows no hesitation in belittling allies, openly attacking the EU’s liberal values. The U.S. displays no serious interest in defending democracy in Europe, often siding with Russian President Putin implicitly. This spring, the U.S. has announced withdrawals of some of the forces stationed in Eastern Europe. There is a real risk that NATO fails to survive the Trump era. In East Asia, the U.S. looks less unreliable than it is in Europe. However, Trump doesn’t conceal his dissatisfaction about South Korea’s lack of concrete plan to execute the pledged $350 billion investments into the U.S. as a part of a trade deal. Takaichi is getting along with Trump better than Lee though  no one knows how long the cordial relationship can last with the famously unpredictable president. It makes sense for those that are pushed around get together to boost their collective positions. 

On the trade front with China, South Korea has always been sandwiched between China and the West that is represented by the U.S. and Japan. Its geographical proximity often made South Korea’s economic relationship closer to China than Japan or the U.S. On the rise of China in the early years of the 21st century, Corporate Korea rushed to China to take advantage of surging growth rates there and built significant presence in the Chinese economy. Corporate Korea’s fortune in China, however, had changed abruptly on the South Korean government’s decision in 2016 on deployment of the Terminal High Altitude Area Defense (THAAD) system. The move enraged China. Chinese consumers went on a large scale state-sponsored boycott of South Korean products. Amid intense backlash, consumer giant Lotte decided to pull out of China entirely. Anger calmed down in the following years, but things were never be the same for South Korean corporations. Then, in recent years, Xi Jinping’s industrial policy of Made in China 2025 began to show results. With great emphasis on competitiveness of its manufacturing industries, factories in China are cranking out manufactured products at improved quality compared to what they once were, at very reasonable prices, of course. Chinese consumers no longer attach special value to foreign brands that may be of somewhat better quality but are priced higher. In the mid-2020s, therefore, South Korean giants are systematically scaling back or withdrawing their operations from China due to intensifying local competitions or supply-chain shifts. Recent surveys shows nearly 40% of South Korean companies operating in China plans to downsize, relocate or fully withdraw. On top of enhanced competitiveness of Chinese products, domestic demand remains sluggish and the Communist Party is not doing anything serious to lift Chinese consumers. For many foreign corporations China has outlived its usefulness as an export base, and the U.S. is employing a tough stance on imports from China. It makes sense for South Korean giants to go someplace else, such as Southeast Asia and India, or invest directly into the U.S. 

In this backdrops facing the United States and China, South Korea and Japan have more shared interest than ever. In Davos in February, Canadian PM Mark Carney called for middle powers to get together in a world of shifting geographical environment in order to enhance their presence. South Korea and Japan are embodying his idea into practice. 

About the author: Mr. Suzuki is a retired banker based in Tokyo, Japan.