South Korean President Lee Jae-myung waves alongside First Lady Kim Hye-kyung as he takes the oath of office on 4 June outside the National Assembly in Yeouido, Seoul (Chris Jung/NurPhoto via Getty Images)

The transactional worldview of South Korea’s new president

Lee Jae-myung’s pragmatic approach will test alliance limits with America and bring a more ambiguous stance toward China.

Chae Jeong

5 June 20253 min read

South Korea’s presidential by-election, triggered by the impeachment of Yoon Suk-yeol over his short-lived effort to impose martial law in December, has elevated Democratic Party figurehead Lee Jae-myung to the Blue House. Known for his populist economic agenda and confrontational political style, Lee assumes the presidency at a delicate moment internationally – and his early foreign policy signals suggest a pragmatic, and potentially risky, shift in Seoul’s regional posture.

Lee’s remarks during the campaign reveal a worldview where foreign policy is guided less by doctrine or alliance norms, and more by transactional benefit. When asked how South Korea would respond to a potential conflict between China and Taiwan, Lee responded that the country should simply say “xie xie” – “thank you” – to both sides. The comment sparked backlash at home and abroad, yet it underscored Lee’s preference for ambiguity over alignment in one of the region’s most consequential flashpoints.

He was similarly blunt when asked about dealing with a second Trump administration. “I would even crawl between Trump’s legs,” he said, “if that’s what it takes to get a better deal”. The line was deliberately provocative – a theatrical way of signalling that he is willing to sideline diplomatic decorum to secure outcomes. Lee’s foreign policy instincts lean towards transactional realism: less about aligning with democratic values or defending multilateral norms, and more about maximising flexibility to serve South Korea’s immediate domestic interests.

That domestic imperative looms large. Lee campaigned on a platform of economic redistribution, welfare expansion, and debt relief – policies that require sustained economic growth and fiscal room. Given South Korea’s slowing economy and fractious political environment, closer economic ties with China may appear an expedient path. China remains South Korea’s largest trading partner, accounting for close to 20 per cent of its total exports in 2024.

Lee has expressed openness to re-engaging Pyongyang, in line with progressive precedent. But the context has shifted.

But Lee’s pragmatism introduces significant foreign policy risks. South Korea’s security remains tied to its alliance with the United States. The US–ROK alliance underpins a strategy of deterrence on the Korean Peninsula, facilitates joint military operations, and connects Seoul to a broader network of regional partnerships – including with Australia, Japan, and other Indo-Pacific democracies.

Lee’s apparent desire to hedge between Washington and Beijing may compromise this position. While previous progressive administrations, such as Moon Jae-in’s, also sought to manage this balance, they did so without casting doubt on the foundational nature of the alliance. Moon’s engagement with Beijing was tempered by clear alignment with the United States on issues such as missile defence and sanctions. Lee’s willingness to reframe South Korea’s posture as non-aligned – even rhetorically – could weaken trust among key partners.

Australia should take notice.

Canberra faces similar structural tensions: a deep economic relationship with China and a strategic reliance on the United States. But unlike Seoul’s emerging ambiguity, Australia has made firm commitments to the US-led order – through AUKUS, enhanced Quad engagement, and greater defence spending. If South Korea under Lee moves toward a more ambivalent posture, it may complicate Australia’s efforts to coordinate regional security initiatives. It could spell the end of speculation of South Korea participating in some fashion in either AUKUS or Quad initiatives.

The inauguration ceremony of Lee Jae-Myung as the 21th President of Republic of Korea (Republic of Korea Government)

North Korea presents another test. Lee has expressed openness to re-engaging Pyongyang, in line with progressive precedent. But the context has shifted. North Korea now enjoys closer ties with Russia, a more permissive environment from China, and continues to advance its missile program. Any engagement strategy that lacks close coordination with allies and partners risks being misread – and may embolden rather than deter.

Lee’s presidency is therefore not just a domestic political reset. It is a live test of how a middle power navigates great-power competition. His pragmatism may offer short-term economic benefits, but over time it risks eroding the trust and alignment that undergird South Korea’s regional standing.

For Australia, this calls for both vigilance and engagement. Bilateral channels with South Korean counterparts should be strengthened – especially on export controls, defence technology, and Indo-Pacific maritime cooperation. At the same time, Canberra must invest in multilateral frameworks that preserve cohesion even amid domestic leadership shifts.

Lee may believe that flexibility is South Korea’s greatest foreign policy asset. But history suggests that in times of strategic flux, clarity – not ambiguity – is what deters miscalculation and sustains alliances.

About the author

Chae Jeong

Chae Jeong is a Research Assistant at the Lowy Institute, focusing on Australia–Papua New Guinea relations.

Topics

South Korea