The Great Allied Shakedown

In the first half of 2019, the Trump administration’s instincts on alliances raised anxieties in Seoul and Tokyo. According to press reports, the administration was mulling a plan to demand a so-called “cost-plus-50-percent” agreement with South Korea and Japan, two major U.S. allies in the Asia-Pacific. As the framing suggests, Seoul and Tokyo would be expected to pay a pure 50 percent “premium” for the privilege of hosting U.S. troops on top of whatever might, under more normal circumstances, be a standard agreement on cost-sharing.

While the “cost-plus-50-percent” proposal was quickly denied as being under consideration by then-acting U.S. Secretary of Defense Patrick Shanahan, it turns out that the reality is far worse. By November 2019, it became apparent that the president was apparently of the view that “cost-plus-50-percent” didn’t go far enough. The administration’s approach is now to go for a door-in-face negotiation approach, asking both South Korea and Japan to cough up an extortionate amount in excess of four times their status quo payments.

U.S. President Donald J. Trump has a fundamentally idiosyncratic understanding of alliances – one that separates him sharply from every post-war American president going back to Harry Truman. Where other American leaders have seen alliances as unions built on shared values, interests, and solidarity, Trump views the functional provision of treaty alliances – collective defense – as a valuable service offered by the United States. Accordingly, Trump expects that the United States be compensated commensurate with the value he perceives in this service.

The result of this view of treaty alliances is an extortionary approach to cost-sharing talks and disregard for the fundamental dignity of longstanding American partners. To be sure, there is a legitimate debate on cost-sharing that has taken place in the past and should even take place today. Even the Obama administration arrived at an understanding that American allies, especially in Europe, should do more to carry their fair share of the burden of collective defense and make investments in autonomous capabilities. But the Trump administration’s approach lays waste to any reasonable conversation about cost- and burden-sharing (two distinct concepts). Instead, the result is a mafia-style shakedown, turning treaty alliances into nothing more than protection rackets.

Seoul appears to be less fortunate than Tokyo. In the final months of 2018, Washington and Seoul were meant to arrive at a new Special Measures Agreement – the formal name for the allies’ five-year cost-sharing agreement. Unable to do so because of the Trump administration’s insistence on sharp increases – albeit less extortionary than the present demands – the two sides arrived at an interim one-year SMA extension, which included a modest 8 percent increase in South Korea’s contributions year-on-year. As that one-year extension nears expiration, the two countries are now log-jammed over another extension. According to press reports, Trump wanted to set the American ask at a nice, round figure of $5 billion – a roughly fivefold increase – before State and Defense Department staff intervened to convince the president to back down to $4.7 billion. On a recent trip to South Korea, Mark Esper, the U.S. secretary of defense, refused to confirm or deny any specific numbers, but made the case that South Korea, as a wealthy country, “could and should” pay up. What remains unsaid is what happens if Seoul does not.

The fate of some 28,500 U.S. troops on the Korean Peninsula hangs in the balance. There’s a particularly disconcerting theory of why the administration is choosing to negotiate in this manner: perhaps it expects a resounding “no” from the left-leaning government of South Korean President Moon Jae-in. Trump would then have a pretext to draw down U.S. troops from South Korea – something he has reportedly mooted in the past. After all, in Trump’s mind, if the U.S. military’s function as a deterrent and a tripwire for broader American involvement in full-scale hostilities on the Korean Peninsula amounts to nothing more than a “service” that South Korea can lease, why shouldn’t the United States withdraw?

American alliances – in Asia and in the transatlantic context – are not an altruistic enterprise. Alliances serve as force multipliers for American power and influence around the world. Moreover, formal alliances allow the United States to extend nuclear deterrence to nonnuclear countries like South Korea and Japan. Provided the health of extended deterrence is robust – and challenges to extended deterrence are acute today in Northeast Asia with North Korea’s fast-improving nuclear capabilities – allies won’t proliferate. That assumption, too, is under question.

It was in the context of the recent cost-sharing debate in South Korea that former foreign minister and chief Six-Party Talks negotiator for South Korea Song Min-soon suggested that Seoul ought to think about acquiring an independent nuclear deterrent. South Korean ultraconservatives and conservatives have often made the case for an independent deterrent, concerned about North Korea’s capabilities and the possible unreliability of American extended deterrence, but Song served progressive President Roh Moo-hyun. His comments should be taken as a sign of the way the winds are blowing in Seoul today.

Song’s comments aren’t the only source of concern. Chosun Ilbo, South Korea’s most prominent conservative-leaning newspaper, generally a stalwart supporter of the U.S.-South Korea alliance, published an editorial ahead of Esper’s trip suggesting that Seoul should get something in return for the high price tag the United States seeks to extract, including American support for nuclear attack submarines and, above all, a NATO-style nuclear-sharing arrangement, whereby Republic of Korea Air Force fighters might have aircraft and pilots certified to deliver American nuclear weapons in a conflict. Many of these ideas have long been part of conservative wish lists in South Korea. While the current progressive government will be leading the SMA talks, frustrations regarding the alliance are frothing up on both sides of the political spectrum in South Korea.

The Trump administration’s approach to alliance management amounts to strategic malpractice. It stands to squander one of the greatest asymmetric advantages the United States enjoys in the burgeoning strategic competition with China in East Asia – all based on a flawed premise that alliances are little more than a transaction for a service. What the administration practices undercuts policy guidance that can be found in its many strategic documents, including the 2017 National Security Strategy, the 2018 National Defense Strategy, and the 2019 Indo-Pacific Strategy Report – all of which unconditionally emphasize the value of alliances.

If American alliances survive the Trump administration in good – or reasonable –  health, the manner in which this administration has handled cost-sharing will make future, good faith consultations on the matter more difficult. The notion that Seoul and Tokyo should shoulder greater burdens for their own defense is not particularly controversial in itself, but whoever might inherit the White House after Trump will have a difficult time initiating that conversation with American allies.