Key Takeaways:

- A shifting U.S. strategic posture—driven by budget pressures and prioritization of China—requires South Korea to rethink its defense role beyond the Korean Peninsula.

- With one of the strongest defense industries among U.S. allies, Seoul is well-positioned to expand its regional contribution, modernize its forces, and support U.S. posture in the Indo-Pacific.

- Deepened industrial cooperation—especially in shipbuilding, repairs, and arms exports—offers a pathway to a more balanced, flexible, and future-ready ROK–U.S. alliance.

There is a new administration in Washington, bringing with it a reshaping of the strategic discourse surrounding national security that also reflects some broader and durable shifts in American grand strategy. Across the U.S. alliance network, partners are evaluating the shifting force posture and budgetary measures and preparing appropriate measures in response.

As one of America’s oldest allies, dating back to the friendship forged in the Korean War, the Republic of Korea may need to reassess its traditional defense thinking in response to shifting international conditions. Luckily, it is well-prepared to do so, as it maintains the healthiest defense industrial base of any American ally, a large and capable military, and a 2.8 percent defense budget that has been consistently higher than most U.S. allies. 

Likewise, Americans will need to continue to take into account South Korea’s security concerns, with a give and take in the alliance where both parties understand each other and account for each other’s core national interests.

For policymakers, the changing security environment is causing tough but important conversations about national security strategies in both countries. In Washington the discussion is mostly about how to balance scarce resources between regions, as the United States evaluates the security situations in Asia, Europe, the Middle East, and the Western Hemisphere. Given China’s economic heft and sustained military expansion, the consensus in Washington is quickly becoming that the United States needs to prioritize its budget and forces on deterring China in the Indo-Pacific.

For its part, Seoul can no longer afford to see its security interests and relationship with America purely in terms of the Korean Peninsula—instead, it needs to view its interests in terms of the broader Indo-Pacific, including consideration of the disruptive role China is playing in the regional order and consideration of America’s interest in protecting its other allies and partners throughout the region from Chinese aggression. A free and open Indo-Pacific with respect for sovereignty should be a core South Korean national interest.  

The Republic of Korea should consider a position of strategic flexibility toward its neighborhood. To effectively deter the regime in Pyeongyang, South Korea needs to continue to invest in and modernize its air, naval, and missile forces. These forces, of course, also provide Seoul with strategic flexibility when considering other potential crises in the region.

Of course, just as China is the preeminent national security concern of the United States, North Korea is quite rightfully the preeminent national security concern of South Korea. Americans well understand that deterring North Korean aggression will remain the primary objection of the Republic of Korea Armed Forces and will need to continue to provide certain strategic enablers relevant to deterring aggression on the Korean peninsula by the regime in Pyeongyang.

In the coming years there may need to be some sort of recalibration of the American forces permanently stationed in South Korea, with air capabilities more relevant to deterrence potentially prioritized over ground troops. If this were to occur, South Korean policymakers should see this in positive terms, with the United States adjusting its forces stationed in South Korea based on the modern security landscape, avoiding the stagnation that could result from simply continuing the military policies from before. In general, of course, the United States is likely to increase the numbers and quality of military capabilities in the Western Pacific in the coming years, given that deterring China is becoming the number one national security priority of the United States.

South Korea’s defense industrial base is a major topic of conversation in Washington national security circles these days, and for good reason. In the past several years, South Korea’s defense industrial base has grown rapidly—expanding its role in the global arms market, advancing its innovation sector, and ensuring the capability to efficiently and cost-effectively mass produce vital defense equipment. The ROK paired explosive internal development with increased defense cooperation across continents—ensuring its role as a leader in the global defense industry. 

As South Korea has strengthened its defense industrial base, it has made itself an even more vital ally to the United States, partnering in ensuring the stability of the Peninsula.  There is a massive opportunity for the ROK to work as a force for good in this space on the Korean peninsula, throughout the Indo-Pacific, and even in the United States itself. 

For instance, two prominent Korean shipbuilding contractors, HD Hyundai and Hanwha Ocean, have both proposed a range of specific cooperation initiatives, expressing a clear commitment to support the revitalization of U.S. shipbuilding. Most prominently, Hanwha Ocean acquired the Philadelphia shipyard in December of 2024, facilitating the revitalization of U.S. shipbuilding in the continental U.S., one of the biggest national security goals of President Trump’s second administration.

Additionally, local shipyards in South Korea could provide a cost-effective, time-saving, and viable option for revitalizing the U.S. shipbuilding industry by performing repairs on U.S. Navy ships in South Korea. This option makes sense in terms of benefits to South Korea companies and to shipyard workers in South Korea, and also benefits the United States in several ways. In terms of shipbuilding, doing repairs in South Korea frees up space at American shipyards that need to be building ships to expand the U.S. Navy. In terms of force posture there are benefits for both America and South Korea, as doing ship repairs in South Korea helps keep more American ships forward deployed to the Western Pacific and contributing to regional security.

In short, these in-theater repair opportunities make more sense logistically than having to haul ships back across the Pacific to the United States and will also enable the U.S. Navy to keep ships in the Western Pacific for longer and more often.

The United States also sees South Korea’s potential for expanded regional arms sales as a benefit to regional security, with Seoul arming countries concerned about threats to their national sovereignty and thereby contributing to stability throughout the Indo-Pacific. The goal of the United States is an Indo-Pacific composed of states able to defend their sovereignty against territorial aggression, and South Korean sales of military equipment to the countries whose sovereignty is being aggressively targeted, such as the Philippines, is therefore seen by Americans as an important contribution to regional stability.  Luckily for both sides, there is little crossover between what American and South Korea companies are offering and therefore little friction in terms of industrial competition. Furthermore, the demand for weapons systems in Asia so far outpaces supply that there is indeed very little worry of competition between the American and Korean defense industrial bases.

Washington and Seoul have a lot to talk about if they are to successfully chart a path forward, modernizing the alliance for a new era of security cooperation. Luckily for both sides, the bonds of friendship between the peoples of the two countries are very real, and the two countries both have impressive resources to call upon in aiding each other, including their defense industrial bases, military might, and the ingenuity of the American and Korean peoples. As the threat landscape in the Indo-Pacific grows increasingly more imminent, South Korea remains a key ally and will remain at the forefront of U.S. national security thought.