An interview with South Korea’s president

Mr Lee does have reason to feel confident. A year after taking office, his approval ratings remain around 60%, among the highest for a South Korean president at this stage in his term. Voters give him credit for the political stability. He is fortunate for being in office during a scorching stock market rally. Mr Lee has also managed to deftly steer South Korea’s relations with notable powers, including America, China and Japan. Yet, as Mr Lee looks ahead to the rest of his five-year term, challenges loom.

Following Mr Yoon’s declaration of martial law in late 2024, the country cycled through three acting presidents. Mr Lee, as opposition leader, galvanised resistance to the move. In office his lively social-media presence and habit of live-streaming cabinet meetings appeal to voters. It has not hurt that the conservative opposition People Power Party (PPP) remains enthralled to the disgraced ex-president. In local elections on June 3rd, candidates from Mr Lee’s Democratic Party (DP) took 12 of 16 big mayoral and gubernatorial jobs (though the conservative incumbent in Seoul held on).

Somewhat unexpectedly for a left-winger with a background as a labour lawyer, Mr Lee campaigned on a promise to boost capital markets. He called for reforms to corporate governance to help raise the country’s main equity index, the KOSPI, from under 3,000 to 5,000 within his five-year term. Mr Lee was lucky to take office amid an AI gold rush in which South Korean tech giants, such as Samsung and SK Hynix, profit by making memory chips. The KOSPI has nearly tripled over the past year, reaching record highs of over 8,000.

Mr Lee has lived up to his promise of pragmatism in foreign policy as well. Leaders from the DP tend to favour engagement with North Korea and to warm to China to make that easier to do; they also typically have tetchy relations with Japan, the former colonial overlord. Mr Lee has stabilised relations with China without seeming obsequious. Most consequentially, he has forged a bond with Japan’s right-wing prime minister, Takaichi Sanae, born of a shared understanding that the neighbours must get along in the face of a more assertive China and a less reliable America.

Dealing with the Donald

Relations with Donald Trump could have been disastrous. Mr Trump has often railed against South Korea as an ungrateful ally. But Mr Lee’s government has pledged to raise defence spending to 3.5% of GDP (from 2.7% last year); it also wants to take greater responsibility within the alliance’s command structure. “When it comes to the defence of our nation, we must take matters into our own hands,” Mr Lee says. Pete Hegseth, America’s secretary of war, has taken to calling South Korea a “model ally”.

Mr Lee entered office amid negotiations over Mr Trump’s “liberation day” tariffs. South Korea struck a deal for tariff relief in exchange for a $350bn investment pledge, with caps on annual outflows to limit the damage to the local economy. Mr Lee also slid several long-standing security goals into the package, gaining the American president’s blessing for South Korea to possess nuclear-powered submarines and to develop the capacity to enrich and reprocess nuclear fuel. He insists it will only be used to enrich to the low levels needed to power atomic reactors and that it is “not desirable nor realistic” for South Korea to get its own nuclear weapons. Nonetheless, having enrichment facilities will bring it a big step closer to being able to build the bomb, if it ever decides to.

Implementing the deals reached with the mercurial American president is the first big challenge looming over the rest of Mr Lee’s term. Last week American officials visited South Korea to continue negotiations over nuclear issues. Big gaps still need to be bridged, not least over the question of where the submarines will be built. (Mr Trump wants them made in America.) Congress would have to agree to giving South Korea nuclear-enrichment rights.

South Korea’s position would be a good deal less precarious were it not for the nuclear-armed neighbour to its north. Mr Lee, in keeping with DP tradition, has made every effort to reach out. But North Korea, which in recent years has taken to calling South Korea a “hostile state” and is now enjoying the fruits of a new alliance with Russia, has shown no interest in talking to the South. Mr Trump’s “unique personality” can be “very helpful” in the current situation, he says. Kim Jong Un, North Korea’s dictator, says he will meet Mr Trump only if the long-held goal of “denuclearisation” is off the table . Following the war in Iran, North Korea will be even less inclined to give up its arsenal, Mr Lee notes.

Another set of thorny problems loom at home. While AI-related investment has thus far lifted South Korean equities and Mr Lee’s fortunes, his standing would suffer if the market dips. Even if the boom continues, it will raise hard questions about how to equitably share newfound wealth. Mr Lee says that new mechanisms, such as a basic income grant, will be needed to “distribute some of the excess profits to the general public”. He has also called for more balanced growth among different regions, pushing chipmakers to build supply chains in less developed parts of the country. As part of that agenda, he wants to move part of the presidential administration out of the Blue House and to an administrative centre south of Seoul.

Mr Lee’s own future is also most uncertain. He entered office with five trials hanging over his head, all related to his earlier spells as a mayor and governor. Mr Lee calls these prosecutions politically motivated. They have been put on hold while he is in office, but seem sure to re-emerge once he leaves. Since the country’s democratisation in the late 1980s, more than half of South Korea’s presidents have been impeached, jailed or both. Mr Lee himself acknowledges that the possibility of falling victim to this vicious cycle is “pretty high”. His legacy will thus in part depend on whether he can break the curse of the Blue House.