China and South Korea, two of East Asia’s largest economies, are facing a renewed test of their trade relationship as U.S. President Donald Trump doubles down on his protectionist policies. With Trump’s administration pushing for more tariffs and trade barriers, economic analysts quoted by SCMP predict that China and South Korea may have no choice but to forge stronger economic ties to shield themselves from the fallout.
While Beijing and Seoul have enjoyed extensive trade relations worth billions of dollars, their economic partnership has been fraught with geopolitical tensions, including the deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system in South Korea. However, the growing uncertainty over U.S. trade policy, particularly Trump’s aggressive push to impose higher tariffs on imports, is expected to drive both countries toward deeper economic integration.
“In the Trump 2.0 era, with protectionism intensifying, South Korea and China must work together to ensure that free and fair trade continues in the region,” said Hyuntai Lee, an associate professor of international studies at Seoul National University.
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With Trump’s return, some experts believe that Washington’s trade war may end up hurting the U.S. economy itself, as affected countries seek alternative trade routes to bypass American tariffs.
Trump’s protectionist stance has already triggered a shift in global trade dynamics. During his first term, his administration launched sweeping tariffs on Chinese goods, escalating a trade war that disrupted global supply chains. His second term is expected to follow a similar path, affecting other Asian powerhouses, and potentially forcing nations like South Korea and Japan to reevaluate their trade policies and deepen ties with China to offset losses.
“I’m expecting a bigger room for China and South Korea to cooperate in the Trump era,” said Huang Rihan, a professor of international relations at Huaqiao University. “Trump doesn’t really value allies.”
Huang noted that Trump’s rhetoric against South Korea’s trade policies, particularly his accusations in early March that Seoul was imposing unfair tariffs on American goods, had already created tensions between the two allies.
“This is a very important signal,” Huang added, pointing out that many South Korean experts are concerned about the unpredictability of Washington’s economic strategy under Trump’s leadership.
China’s Push for Stronger Trade Agreements in East Asia
Beijing has been actively working to solidify economic ties in the region, pushing for a trilateral free trade agreement between China, Japan, and South Korea. The three economies, which account for nearly 25% of global GDP, are already members of the China-led Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade pact.
South Korea, one of the few developed nations to have signed a free trade agreement with China, finds itself increasingly reliant on trade with its neighbor. In 2024, China-South Korea trade rose 5.6% year-on-year, reaching $328.1 billion, surpassing China’s total trade with all 54 African nations combined.
But while economic interdependence is growing, South Korea remains caught in a complex web of geopolitical pressures. The U.S. has been pushing Seoul to join initiatives aimed at countering China’s dominance in key industries, such as the Chip 4 alliance and the Indo-Pacific Economic Framework. Yet, despite these pressures, China remains South Korea’s largest trading partner, making it difficult for Seoul to take sides in the growing U.S.-China rivalry.
Will the U.S. Be the Biggest Loser in Trump’s Trade War?
Many economists believe Trump’s protectionist policies could ultimately backfire, as targeted countries look elsewhere to form new trade partnerships.
South Korea, as an export-driven economy, has little choice but to participate in regional trade agreements that reduce its dependence on U.S. markets.
“As a country highly dependent on global trade, [South] Korea has no choice but to participate in such multilateral cooperation frameworks,” Lee said.
Trump’s tariffs, which are meant to protect American industries, could have unintended consequences. By forcing countries to seek alternative markets, the U.S. could end up isolating itself from global trade networks, a scenario that many economists warn could hurt American businesses in the long term.
South Korean Industries Face Rising Competition from China
Even as China and South Korea explore stronger trade ties, South Korean businesses remain wary of Beijing’s rapid advancements in critical industries.
“The sense of crisis among Korean companies is increasing due to China’s improved technological capabilities. This competitive landscape is indeed a factor limiting cooperation between the two countries,” said Lee.
South Korea’s once-dominant automobile and electronics industries have been losing ground to Chinese competitors. Hyundai and Kia have seen their market share eroded by Chinese electric vehicle manufacturers, while Chinese brands Hisense and TCL overtook Samsung and LG in global television sales for the first time in late 2024.
Chinese shipbuilders now command 70% of global orders for new commercial vessels, compared to South Korea’s 17%. Meanwhile, a government study in Seoul found that China has surpassed South Korea in 136 key technologies, including semiconductor manufacturing.
What’s Next for China-South Korea Trade Relations?
As both countries navigate the uncertainties of a second Trump term, efforts are underway to modernize their 2015 free trade agreement.
“In the phase 2 negotiations, [South] Korea aims to expand market liberalization in service sectors such as entertainment and tourism,” said Junha Kang, a law professor at Hongik University in Seoul and a government trade adviser.
“Both sides need to address non-tariff barriers and improve trade transparency to facilitate smoother transactions.”
Yet, uncertainty looms over whether Japan and South Korea will move forward with deeper trade agreements with China, given Washington’s pressure.
“The U.S. geopolitical alignments with Korea and Japan undoubtedly add complexity to trilateral relations among China, Korea, and Japan,” Kang said.
Can Cultural Exchanges Ease Economic Tensions?
Despite economic and political challenges, Beijing has been encouraged to promote greater people-to-people exchanges with South Korea.
During a February meeting with President Xi Jinping, South Korea’s National Assembly Speaker Woo Won-shik invited Xi for a state visit in November, coinciding with the APEC Summit.
But a key question remains: Will China open its doors to more South Korean cultural exports?
“It’s hard to imagine Beijing making it easy,” said Lee of Seoul National University. “But more cultural exchanges and loosened visa policies might help build trust.”
“The recent move to expand cultural exchanges is a positive sign,” he added. “High-level dialogue channels and institutional mechanisms for cultural content exchange are crucial.”