Lee Jae-myung Steps Into the Fire: Korea’s Next Leader Faces Geopolitical and Economic Turmoil

In March 2025, Lee Jae-myung ascended to the South Korean presidency with a promise to restore order and rebuild trust. What he inherited, however, is a presidency entangled in domestic unrest, economic underperformance, and diplomatic landmines. From the aftermath of U.S. protectionism under Donald Trump, to an increasingly aggressive North Korea, Lee’s leadership journey begins under enormous strain.

An Economy Under Duress

South Korea’s GDP growth has slowed to a crawl, with exports—the engine of its economy—stagnating due to global uncertainty and protectionist policies. The previous U.S. administration imposed tariffs on Korean steel, semiconductors, and electric vehicles, destabilizing the country’s core industries.

To address this, Lee is pushing for structural economic reforms. His administration has unveiled a stimulus package exceeding 50 trillion won (about $40 billion USD), focused on job creation, green technologies, and SME (small and medium enterprise) support. The policy includes tax breaks for startups, investments in high-speed internet infrastructure, and subsidies for AI research.

Perhaps his most controversial proposal is the introduction of a basic income—1 million won per year per citizen—to reinvigorate domestic spending. While some economists applaud the bold vision, others worry about sustainability in a country where aging demographics already strain the pension system.

North Korea and the Quest for Peace

Inheriting a long-frozen dialogue with North Korea, Lee has pledged to pursue peace through mutual cooperation rather than deterrence. But Kim Jong-un remains defiant. Recent missile tests and cyberattacks linked to Pyongyang have only complicated efforts at diplomacy.

Still, Lee has not backed down. His strategy includes reopening the Kaesong Industrial Complex, launching a peace forum in Panmunjom, and seeking trilateral talks with the U.S. and China to address denuclearization. He has even suggested leveraging global forums to highlight peacebuilding efforts, a bold contrast to the military posturing of past administrations.

However, there is risk: Should North Korea escalate provocations, Lee could quickly find himself squeezed between national security hawks at home and an unpredictable international environment.

Managing the U.S. Relationship

The U.S.–South Korea alliance has historically been the bedrock of regional security, but tensions during the Trump years disrupted that status quo. Trump’s call for increased Korean contributions to the cost of hosting U.S. troops, and his unpredictable engagement with North Korea, unsettled many in Seoul.

Lee must now repair and redefine the alliance. While he has shown openness to continuing dialogue with figures like Trump, his main goal is securing a consistent and respectful bilateral relationship. Trade will be a key focus—especially undoing or renegotiating punitive tariffs that have damaged Korean industries.

He also seeks greater autonomy in foreign affairs, indicating that Korea should not always follow U.S. positions uncritically, particularly on matters involving China and regional trade blocs.

A Domestic Mandate With Global Consequences

Lee’s presidency also comes at a moment of political renewal. Following the dismissal of former President Yoon for overreach and constitutional violations, public appetite for democratic reform is high. Lee has vowed to strengthen anti-corruption measures, improve transparency in real estate and business dealings, and reinforce judicial independence.

This domestic legitimacy gives him leverage abroad. If Lee can stabilize the country internally—politically and economically—he may command more respect on the global stage. But every misstep, particularly in handling North Korea or economic reforms, could quickly erode both public and diplomatic confidence.