ED Tightening pressure on Korea

New automobiles for export, cranes and shipping containers are seen at a port in Pyeongtaek, South Korea, Friday. U.S. President Donald Trump's national address darkens the outlook for Korea's economy, trade and security. AP-Yonhap

U.S. President Donald Trump extinguished hopes for a swift end to the war in Iran in his national address, sending oil prices soaring and asset markets tumbling Thursday.

Korea, heavily reliant on energy from the Middle East, is riding rougher waves than most, with President Lee Jae Myung likening the current Korean economy to a "war-like situation" as he asked for swift approval of a 26 trillion won ($17.2 billion) supplementary budget.

As the domestic economy declines, snippets of comments Trump put forth Wednesday (local time) tighten the pressure on Seoul regarding energy, security and trade.

Trump expressed his frustration with nations including Korea for not dispatching ships and personnel to jointly manage the Strait of Hormuz, effectively closed due to the war in Iran. With the case of NATO, Trump has threatened to exit the group.

“You know, we only have 45,000 soldiers in harm’s way over there, right next to a nuclear force — let South Korea do it,” he said during a speech at the White House. While he once again got the troop size wrong — there are around 28,500 U.S. troops in South Korea — his irritation was clear.

On his social media, he further challenged the countries that rely on the Strait of Hormuz for energy to "build up some delayed courage, go to the Strait, and just TAKE IT" — or buy oil from the U.S.

While Trump often vacillates on stances, his discontent over nations and allies refusing U.S. requests has been consistent so far. As a result, Korea will surely have to assess, review and reassess the war on Iran. For starters, Korea has joined dozens of other nations led by the U.K. to discuss cooperation for ensuring free and safe passage through the Strait of Hormuz. A coalition of the willing will enable smoother de-escalation.

On the other hand, Seoul should make sure that the missile defense systems dispatched to the Middle East return without possible conditions attached, such as higher cost-sharing for U.S. military presence. The deployment of U.S. forces and assets in Korea is guided by the U.S.' strategic flexibility, part of the "modernization" of the South Korea-U.S. alliance. It asks that Seoul take more initiative in deterring North Korean provocations and that U.S. forces in Korea, at times, be deployed regionally, including for a possible contingency surrounding the Taiwan islands.

While Korea in principle stands on the same page with the U.S. on strategic flexibility, its foremost priority is maintaining peaceful existence with North Korea. Despite efforts by both Seoul and Washington, North Korea seems less inclined to engage in talks with Washington as it strengthens its ties with China and with Russia through the war in Ukraine.

On trade issues, South Korea and the United States have yet to specifically announce which areas the former will invest in as part of its $350 billion pledge in return for lower blanket tariffs. Before the conflict in Iran, Trump had threatened to rescind the 15 percent tariff rate, citing the slow pace of progress. With South Korea also under investigation by the U.S. under Article 301 of the Trade Act, trade officials must prepare adroit and effective schemes to deal with the potential outcomes and aftermath.