Donald Trump Claims He Demanded $10 Billion in Defense Fees from South Korea, Both Sides Allegedly Agreed to About $3 Billion Annually Short-Term, Then Gradually Increase

Donald Trump stated that during his first presidential term, he requested South Korea to pay $10 billion annually as "protection fees." After South Korea expressed dissatisfaction, both sides allegedly agreed to approximately $3 billion annually in the short term, with subsequent annual increases.

This statement came after Trump announced a significant reduction in the annual U.S.-South Korea joint military exercises. He claimed South Korea refused to participate in U.S. actions against Iran, using this as a reason to adjust the scale of military exercises.

Trump asserted that South Korea "basically did not pay" for the costs of U.S. troops stationed in South Korea before he took office, and later accepted an arrangement to share nearly $3 billion annually; however, U.S. media fact-checks indicated that South Korea has been covering the costs of the stationed troops since 1991, with annual payments exceeding $800 million by the end of the Obama administration.

Existing public records show that during Trump's first term, South Korea only achieved an 8.2% increase in costs for a one-year period, with annual amounts still below $1 billion, and no agreement was reached for $3 billion annually with continuous annual increases.

The Biden administration did not "revoke the $3 billion agreement." Reports indicate that negotiations stalled in 2020 due to Trump's high demands, resulting in no new agreement; subsequently, both sides reached a 13.9% increase in 2021 and an 8.3% increase in 2024.

Trump framed the alliance commitment of U.S. troops in South Korea as a re-pricing of security services, which actually involves a cost-sharing agreement under the U.S.-South Korea Mutual Defense Treaty, rather than South Korea purchasing general commercial services from the U.S.

In market mechanisms, if defense cost-sharing is directly linked to the scale of military exercises, regional military actions, or bilateral trade negotiations, South Korea would need to reallocate resources between fiscal expenditure, diplomatic autonomy, and commitments to the U.S. alliance. The U.S. could shift the costs of stationed troops to its allies, but excessively high and unstable demands would increase uncertainty in the alliance, prompting South Korea to increase its own defense investments, seek alternative security arrangements, or enhance its bargaining power on regional issues. wearegreenbay+1

Source: Public Information