Tariff Dispute

East Asia Caught Between Washington and Beijing

Japan, South Korea, and Taiwan are opting for de-escalation in the tariff dispute with the United States. Europe should take note of East Asian democracies’ behavior: it finds itself in a similar dilemma.

East Asia’s democracies are pushing ahead with negotiations in the tariff conflict with the U.S.: South Korea's Finance Minister Choi Sang-mok and Industry Minister Ahn Do-geun are traveling to Washington for talks that will reportedly take place on Thursday. A Japanese delegation has already visited the White House last week.

Initial insights from these talks and consultations can be drawn for Europe as well. Those who had hoped to exert joint pressure on the U.S. together with East Asian democracies will be disappointed: neither South Korea nor Japan currently aims to form a united front with the EU against Trump’s tariff policies. Nor are they coordinating much among themselves. Both countries are focused on rapid de-escalation, even if it means making far-reaching concessions.

However, this isn’t just about trade. Trump is demanding increased energy imports and investments in the U.S. from his Asian allies, a new sharing of defense responsibilities, and better conditions for American tech companies. A positive sign is that Trump appears to be taking the talks seriously. Even though Japan’s delegation was led only by its Minister for Economic Revitalization, Ryōsei Akazawa, the U.S. president spontaneously showed up at the negotiating table: a clear sign of his interest in a successful outcome.

A Geopolitical Tightrope Between China and the U.S.

The tariff conflict also has geopolitical dimensions. Japan and South Korea are direct neighbors of China, Trump’s real rival. China is the most important trading partner for both countries: for South Korea, also the largest export market; for Japan, the second-largest. At the same time, both are economically intertwined with the U.S. and rely on American military protection. About 50,000 U.S. troops are stationed in Japan, and roughly 28,500 in South Korea. The trade policy is closely tied to security issues, forcing both countries into a diplomatic balancing act.

This situation is similar to that of Europe. China is the EU's third most important trading partner after the U.S. and the U.K. At the same time, European defense policy still heavily relies on the Americans.

Conciliation Over Confrontation

Unlike the EU, East Asia’s democracies are refraining from threatening countermeasures. Seoul has explicitly ruled out retaliatory tariffs and instead plans to support particularly affected industries. Shortly after Trump’s tariff announcements, Taiwanese President Lai Ching-te promised increased imports of U.S. weapons, energy, and food. He also proposed eliminating all tariffs between the U.S. and Taiwan. Tokyo is also unlikely to impose retaliatory tariffs, not least due to its dependency on U.S. gas and food imports. Punitive tariffs would further drive up inflation—a risk the Japanese government is keen to avoid.

The East Asians’ balancing act between Beijing and Washington is likely to become even more difficult in the coming months. According to media reports, the Trump administration aims to isolate China. In return for a U.S. tariff relief, countries like Japan and South Korea are being asked to block Chinese goods in transit, prevent Chinese companies from setting up operations, and impose tariffs on cheap imports from China. One sign of this strategy is a 90-day delay in imposing many of the threatened U.S. tariffs for about 70 countries, including Japan, South Korea, Taiwan, and the EU. For China, however, Trump has increased tariffs to 145 percent.

In parallel, China is warning other nations not to side with the U.S. “Appeasement cannot bring peace, and compromise cannot earn respect,” a spokesperson for the Chinese Ministry of Commerce said. “China strongly opposes any party reaching a deal at the expense of its own interests. Should this happen, China will never accept it and will respond resolutely.”

The People’s Republic is not only applying pressure but also seeking rapprochement. Just before Trump’s global tariff announcements, the trade ministers of China, Japan, and South Korea met and announced plans to advance a long-delayed trilateral free trade agreement. Chinese state media even claimed that a joint response to the U.S. tariffs had been agreed upon. Seoul and Tokyo quickly denied this.

A trilateral agreement between China, Japan, and South Korea still seems a long way off. Negotiations began in 2012 and have repeatedly stalled due to geopolitical tensions, historical conflicts, and protectionism. Moreover, Japanese and South Korean industries often compete directly with each other.

Most importantly, Japan and South Korea still deeply distrust China. Both have experienced how China uses trade as a political weapon, such as export bans on rare earths. In 2017, after the U.S. stationed its THAAD missile defense system in South Korea, Seoul was subjected to a Chinese war of attrition, including extensive boycotts of South Korean goods.

The U.S. under Trump may be a difficult partner, but China, too, has no hesitation in enforcing its political interests through power. As long as Trump doesn’t go too far, the U.S. remains the more important partner for Asia’s democracies.

American Gas for Asia

Trump’s strategy seems to be working. In trade negotiations, for example, the Japanese have signaled their willingness to lower safety standards for cars. Japan is also planning to invest in a long-planned pipeline project in Alaska to import more U.S. gas and reduce its trade deficit. The 1,280-kilometer pipeline would run from northern Alaska to the southern coast, where the gas would be liquefied and shipped to Asia. South Korea and Taiwan could also participate. The project had long been stalled but is now gaining momentum.

Defense spending was also on the agenda during the U.S.-Japan talks. When Trump announced his direct involvement in the negotiations via social media, he also mentioned that “the costs of military support” would be discussed. Japan has since offered to expand its security engagement in the Pacific, as a sign of loyalty to the U.S. and to help contain China.

Additionally, the U.S.-South Korea talks are expected to address defense costs. Seoul currently pays about $1 billion annually for the stationing of American troops. Under the Biden administration, the U.S. and South Korea negotiated an 8.3 percent increase to take effect in 2026. Trump, however, still considers this too low. In an interview with the Financial Times, South Korea’s interim president Han refrained from commenting on whether he would agree to a further increase.

Digital Policy as a Negotiation Topic

South Korea may also come under pressure in the digital sphere. So far, it has denied Google access to high-resolution geodata, rendering Google Maps largely unusable in the country. Seoul has always justified this on national security grounds, though domestic providers like Naver and Kakao have benefited. Now, South Korea may consider granting better access to the Americans.

Trump is unlikely to face much resistance. Interim president Han Duck-soo was anything but combative: “Our industrial capabilities, our financial development, our culture, our growth, and our prosperity are largely due to the help of the United States,” Han told the Financial Times. In light of this gratitude, he said he would strive to find mutually beneficial solutions.

*Frederic Spohr leads the Seoul office of the Friedrich Naumann Foundation for Freedom. Interns Wencke Rynek and Zeynep Gezen contributed to this article.