S Korea’s Lee Jae-myung era: Economic reform, Artificial Intelligence, and global vision

Nearly a year and a half has passed since then-President Yoon Suk-yeoldeclared martial law in South Korea on the evening of December 3, 2024.

During this period, South Korea managed the political crisis through established legal procedures, with Lee Jae-myungelected as president and taking office on June 4, 2025.

Since then, the new administration has faced a range of challenges across multiple areas. Amid a rapidly shifting international and regional landscape, these challenges can broadly be grouped into several key areas.

First, it is important to examine how South Korea, a major Asian economy that transitioned to democracy in the late 1980s, responded to a crisis that once seemed unimaginable: the declaration of martial law.

Although some Western countries advised their citizens to exercise caution or reconsider travel to South Korea immediately after the declaration, the demonstrations and protests thatfollowed were largely peaceful, with no major disruptions reported.

The martial law decree was subsequently revised, while police and military personnel were prevented from entering Parliament during the period of emergency rule.

Legal investigations were also launched into the officials and units involved in the decision to impose martial law.

Beyond restoring domestic stability, the new government’s priorities included improving economic indicators and rebuilding international confidence. Its economic measures aimed not only to support financial markets but also to provide direct relief to households.

Interdependence and security relations

High-level diplomatic engagement has been one of the key tools for rebuilding international confidence.

During his first year in office, the South Korean president visited 14 countries, while 13 foreign leaders visited South Korea. Notably, both US President Donald Trump and Chinese President Xi Jinpingvisited the country.

Seoul has also remained focused on developments in its region, where political and economic issues are increasingly intertwined. Key priorities include ongoing trade negotiations with the United States and the evolving security partnership between the two allies.

Discussions between Seoul and Washington have centred on trade, security, semiconductors, and supply chain resilience, with potential cooperation also expanding into artificial intelligence, shipbuilding, and energy.

The “US-South Korea Strategic Trade and Investment Agreement,”announced in November 2025, reflects efforts to adapt bilateral economic ties to changing global trade conditions.

The agreement demonstrates that while economic interdependence between the two countries remains strong, Seoul is seeking to protect its industrial interests while deepening cooperation with Washington in economic security, advanced technologies, and strategic industries.

This approach reflects the Lee Jae-myung administration’s broader goal of building a more comprehensive and future-oriented alliance capable of responding to a rapidly changing global environment.

Following the Lee Jae-myung administration’s arrival in office, the future direction of South Korea-Japan relations has become another closely watched issue in the context of regional cooperation.

Despite expectations that Japan’s newly elected Prime Minister Takaichi would take a cautious approach due to longstanding historical disputes between the two countries, relations have shown signs of renewed engagement.

During theirmeeting in January 2026, Lee and Takaichi played drums together in a symbolic display of goodwill, highlighting a mutual interest in maintaining dialogue and expanding cooperation.