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The U.S. and South Korea reach a military cost-sharing agreement after a deadlock under Trump

Negotiations over how to share the cost of the military alliance came to an impasse in March 2020, when the Trump administration demanded that Seoul increase its contribution fivefold.

U.S. Army mobile equipment sitting in a field in Yeoncheon, South Korea, near the border with North Korea on June 17, 2020.
U.S. Army mobile equipment sitting in a field in Yeoncheon, South Korea, near the border with North Korea on June 17, 2020.Read moreAhn Young-joon / AP

WASHINGTON — The United States and South Korea announced that they have reached a cost-sharing agreement for U.S. troops stationed on the Korean Peninsula, breaking through a deadlock stemming from the Trump administration’s demand for a significant increase in payments.

The agreement includes a "meaningful increase" in payments from South Korea, the State Department said Sunday in a statement, but neither side provided details about the deal, which is being finalized.

Negotiations over how to share the cost of the military alliance came to an impasse in March 2020, when the Trump administration demanded that Seoul increase its contribution fivefold.

The agreement comes as the two countries begin a nine-day joint military exercise this week, although the drills will be conducted as computer simulations rather than field exercises because of the coronavirus pandemic, according to a statement from South Korea's Joint Chiefs of Staff.

The Biden administration has sought to show that the United States is committed to its allies and military defense agreements.

As president, Donald Trump sharply criticized allies for not paying enough toward the cost of U.S. military defense in their countries, including on the Korean Peninsula, where about 28,500 U.S. troops are stationed. His demands led to increased tensions between the two countries and sparked concerns in South Korea that the United States could reduce its troop presence if it did not meet Trump's request.

During the presidential campaign, Joe Biden pledged to take a more measured approach toward the negotiations.

"As President, I'll stand with South Korea, strengthening our alliance to safeguard peace in East Asia and beyond, rather than extorting Seoul with reckless threats to remove our troops," he wrote in an October 2020 column for South Korea's Yonhap News Agency.

A State Department spokesman said Sunday that the agreement "reflects the Biden-Harris Administration's commitment to reinvigorating and modernizing our democratic alliances around the world to advance our shared security and prosperity."

In a statement, the South Korean Ministry of Foreign Affairs said the two sides had decided to "resolve the gap in the agreement that has lasted for more than a year through prompt signing of the agreement, and will contribute to strengthening" the alliance between the countries.

The countries had discussed a roughly 13% increase to Seoul's payments, or about $1 billion per year, according to two officials, who spoke on the condition of anonymity to discuss ongoing negotiations. Trump had rejected Seoul's proposed 13% increase in 2019, instead demanding up to $5 billion.

"These negotiations have always been contentious between Washington and Seoul in every administration, but Trump's election defeat has helped a lot this time," said Duyeon Kim, a Korea expert at the Center for a New American Security. "Concluding them will remove a big irritant and show that the allies are restoring a part of the alliance, but it's comparatively easier to resolve, because Seoul already had an offer on the table."

The cost-sharing deal with South Korea is crucial to U.S. efforts to counter China's rise with a coalition of like-minded allies, said James Kim, a research fellow at the Asan Institute for Policy Studies in Seoul.

If the Americans doubled down on Trump's pressure on Seoul to pay more, "that could actually push the Koreans further away from them and toward Beijing if they're not careful," Kim said. "Biden wants to forge a better relationship with the allies."

The joint military exercises would send a message to the South Korean public and North Korea that the Biden administration is committed to its alliances with South Korea and Japan and defending them, Duyeon Kim said.

"Halting joint drills will only embolden Pyongyang, and it would be like dropping your shield before a drawn sword," she said.

North Korea has not signaled how it plans to engage with the United States, but the upcoming exercises could a prompt action, experts say. The United States and South Korea have downscaled their drills since 2019, yet North Korea carried out missile tests that year, Duyeon Kim said.

The reduced drills incorporated more computer simulations as the Trump administration sought to engage with North Korean leader Kim Jong Un. Trump also had questioned the usefulness of the exercises as he bemoaned not being "reimbursed" for the costs by South Korea.

In a speech to the party congress in January, Kim Jong Un called on Washington to end the joint exercises and other alliance activities on the peninsula.

"We will have to see how Pyongyang protests the drills, especially when it's preoccupied with domestic challenges. It would be a big mistake to provoke the Biden administration with a weapons or satellite test, especially before his team and policy are in place," Duyeon Kim said. "Whatever action or inaction Pyongyang takes will foreshadow what the U.S.-North Korea and inter-Korean relationships will look like in the foreseeable future."

The Washington Post’s Dan Lamothe and John Hudson in Washington and Simon Denyer in Tokyo contributed to this report.