Foreign News
South Korea’s new president has a Trump-shaped crisis to avert
South Korea’s new president, Lee Jae-myung, has secured a storming victory, but his honeymoon will barely last the day.
The former opposition leader is not getting to enjoy the two-month transition period usually afforded to new leaders, so they can build their team and nail down their vision for the country.
Instead he is entering office immediately, to fill the hole left by the impeachment of the former president, Yoon Suk Yeol, who last December tried and failed to bring the country under martial law.
In electing Lee, with almost 50% of the vote , South Koreans have vehemently rejected the military dictatorship that was almost forced upon them. Lee campaigned on the promise that he would strengthen South Korea’s democracy and unite the country, after a divisive and tumultuous six months.
But that will have to wait. First, he has a Donald Trump shaped crisis to avert.
In the coming months, Trump has the power to destabilise South Korea’s economy, its security, and its volatile relationship with North Korea.
South Koreans were dismayed when Trump slapped 25% tariffs on all Korean imports in April, after already hitting the country with aggressive tariffs on its core industries – steel and cars. They had assumed that being longstanding military allies from the days of the Korean War, and having a free-trade agreement with the US, would spare them.
If these tariffs take effect “they could trigger an economic crisis”, a seasoned advisor to Lee’s Democratic Party, Moon Chung-in, said.
Before Trump’s announcements, South Korea’s economy was already slowing down. The martial law chaos constricted it further. Then, in the first quarter of this year, it contracted. Fixing this has been voters’ number one demand, even above fixing their beleaguered democracy.
But without a president, talks with Trump have been on hold. They cannot be put off any longer.
And there is much more than South Korea’s economy at stake in these negotiations.
The US currently guarantees South Korea’s security, by promising to come to its defence with both conventional and nuclear weapons, were it to be attacked by its nuclear-armed neighbour, North Korea. As part of this deal there are 28,500 US troops stationed in the country.
Yet Trump has made clear he does not plan to differentiate between trade and security when negotiating with South Korea, signalling that Seoul is not pulling its weight in either area.
In a post on his Truth Social platform in April, Trump said that during initial tariff talks with South Korea he had “discussed payment for the big time military protection we provide”, calling it “beautiful and efficient one-stop shopping”.
This approach makes Seoul uniquely vulnerable.
Evans Revere, a former senior US diplomat based in Seoul, fears a crisis is coming. “For the first time in our lifetime we have a US president who does not feel a moral and strategic obligation towards Korea”.
In his first term as president, Trump questioned the value of having US forces stationed in Korea and threatened to withdraw them unless Seoul paid more to have them. It seems likely he will demand more money this time around.
Seoul may not want to pay more, but it can afford to. A bigger problem is that Trump’s calculations, and that of his defence department, seem to have changed. This is no longer just about the money. Washington’s top priority now in Asia is not just stopping North Korea attacking the South, it is also to contain China’s military ambitions in the region and against Taiwan.
Last year, a now senior US defence official, Elbridge Colby, said that South Korea was going to have to take “overwhelming responsibility for its own self-defence against North Korea”, so the US could be ready to fight China.
One option is that the troops stationed here would switch their focus to constraining China. Another, touted by acouple of US defence officials last month, is that thousands of soldiers would be removed from the peninsula altogether and redeployed, and that Seoul’s military would also have to play a role in deterring Beijing.
Not only could this put South Korea in a dangerous military predicament, but it would also create a diplomatically difficult one.
President Lee, who historically has been sceptical of Korea’s alliance with the US, wants to use his presidency to improve relations with China, South Korea’s powerful neighbour and trading partner. He has stated several times that South Korea should stay out of a conflict between China and Taiwan.
“We must keep our distance from a China-Taiwan contingency. We can get along with both”, he said during a televised debate last month.
The political advisor Mr Moon, who once served as national security advisor, reiterated Lee’s concerns. “We are worried about America abandoning us, but at the same time we are worried about being entrapped in American strategy to contain and encircle China”, he said. “If the US threatens us, we can let [the forces] go”, he said.
For Mr Revere, the former US diplomat, this combination of Lee, Trump and China threatens to create “the perfect storm”. “The two leaders may find themselves on very different pages and that could be a recipe for a problematic relationship. If this plays out, it would undermine peace and stability in North East Asia”.
In Pyongyang, Kim Jong Un will no doubt be watching closely, keen to exploit the shifting ground. His nuclear weapons programme is more dangerous than ever, and nothing or no-one has been able to convince him to wind it down – including Donald Trump who, during his first term, was the first US president to ever meet a North Korean leader.
Since returning to office Trump has indicated he would like to resume talks with Kim, which ended without agreement in 2019. In Seoul, there is real concern that this time the pair could strike a deal that is very bad for South Korea.
The fear is that Trump would take an “America first” approach, and ask Kim to stop producing his intercontinental ballistic missiles that threaten the US mainland, without addressing the multiple short-range nuclear weapons pointed at Seoul. And in return, Kim could demand a high price.
Kim has far more leverage than he did in 2019. He has more nuclear warheads, his weapons are more advanced, and the sanctions that were supposed to put pressure on his regime have all but collapsed, thanks largely to Vladimir Putin. The Russian leader is providing Kim with economic and military support in return for North Korea’s help fighting the war in Ukraine.
This therefore gives Kim the cover to make more audacious requests of the US. He could ask Trump to accept North Korea as a nuclear weapons state, and agree to a deal that would reduce Pyongyang’s weapons count rather than get rid of them altogether. Another of his requests could likely be for the US to remove some the security it provides South Korea, including the troops.
“North Korea is in the driver’s seat now. The only curve-ball is how much risk President Trump will take”, said Sydney Seiler, who was involved in the 2019 negotiations on the US side. “The idea there might be some sort of troop withdrawal [included in a deal] is really not that far-fetched”.
Mr Seiler stressed that the US would “not leave South Korea in the dust,” but advised South Korea’s new president to “establish a relationship with Trump early on”, and be clear they expect to be part of any process, if talks materialize.
The new president must move quickly on all fronts, added Mr Revere, arguing that Lee’s first homework assignment should be to come up with a list of 10 reasons why South Korea is an indispensable partner and why American dollars are being well spent; reasons that can convince a skeptical and transactional Trump.
One Ace card South Korea is hoping to play is its shipbuilding prowess. It builds more vessels than any other country bar China, which is now the world’s dominant ship builder and home to the largest naval fleet. This is a frightening prospect for the US whose own industry and navy are in decline.
Last month I visited South Korea’s flagship shipyard in Ulsan on the south coast – the largest in the world – where Hyundai Heavy Industries builds 40-50 new ships a year, including naval destroyers. Sturdy cranes slotted together sheets of metal, creating vessels the size of small villages.
Seoul is hoping it can use this expertise to build, repair and maintain warships for the US, and in the process convince Washington it is a valuable partner.
“US shipbuilding difficulties are affecting their national security”, said Jeong Woo Maan, head of strategy for Hyundai’s naval and ship unit. “This is one of the strongest cards we have to negotiate with”.
In his campaign for president, Lee Jae-myung declared he did not want to rush into any agreements with Trump. Now in office, he could quickly find himself without this luxury.
[BBC]
Ten people have been killed after a fire broke out in the trauma centre of a government hospital in the eastern Indian state of Odisha.
All the victims were patients, while 11 hospital staff are being treated for burns suffered while trying to rescue patients, state Chief Minister Mohan Charan Majhi said.
The fire – suspected to have been caused by an electrical short circuit – started in the trauma care ICU of SCB Medical College and Hospital in Cuttack city around 02:30 local time on Monday (21:00 GMT Sunday).
Hospital fires are often reported in India, with many blamed on electrical faults. Last October, six critically ill patients were killed in an ICU fire in Rajasthan state.
In 2024, a blaze in the neonatal ICU of a medical college in northern Jhansi city killed at least 10 new born babies. In 2021, a fire in the ICU of Vijay Vallabh hospital in the western city of Virar killed 13 patients receiving treatment for Covid-19. Another fire in 2021 at a newborn care unit in Bhandara district in western state Maharashtra killed 10 infants.
In Odisha, the blaze was brought under control after fire service personnel rushed to the hospital. Patients were moved to other departments inside the same hospital, officials said.
SCB Medical College and Hospital is one of the largest government-run medical facilities in Odisha.
Speaking to reporters after visiting the hospital, Majhi said the fire affected the trauma care ICU as well as an adjoining ICU and wards.
Majhi said medical staff and security personnel “risked their lives” during the rescue operation and some of them were injured, adding that the government had directed officials to ensure proper treatment for those hurt in the incident.
The state government has announced financial compensation for the families of the victims. Majhi said he has ordered a judicial inquiry into the incident and said strict action would be taken against anyone found responsible.
Short circuits are among the most common causes of hospital fires in India. Hospitals are particularly vulnerable to fires because they contain a lot of electrical equipment, oxygen systems and patients who often cannot be moved quickly during emergencies.
[BBC]
The Ecuadorean government has deployed more than 75,000 police officers and soldiers to four of the country’s most violence-wracked provinces, the interior minister says.
The authorities have also declared a night-time curfew in these areas as part of a “new phase” in their “war” on criminal gangs.
Since coming to office in November 2023, President Daniel Noboa has tried to quell drug-related violence but nevertheless Ecuador registered a record murder rate in 2025.
Noboa has also joined a US-led alliance of 17 countries aimed at fighting criminal cartels in the Western Hemisphere.
“We’re at war,” Ecuadorean Interior Minister John Reimberg told residents of the provinces of El Oro, Guayas, Los Ríos and Santo Domingo de los Tsáchilas.
“Don’t take any risks, don’t go out, stay at home,” he added.
Ecuador’s geographical location – sandwiched between Colombia and Peru, the world’s largest producers of cocaine – has turned it into a key transit country for the illicit drug.
Around 70% of the cocaine produced in Colombia and Peru is estimated to be shipped through Ecuador.
Noboa’s government has been working with the administration of US President Donald Trump to quell the flow of cocaine from Ecuador to the US.
Last week, the FBI opened its first office in the Andean country, a move which came shortly after the two countries launched joint counter-narcotic operations.
Noboa was one of the Latin American leaders to attend an international meeting hosted by Trump in Mar-a-Lago, which the US authorities dubbed the “Shield of the Americas” summit.
At the summit, Trump likened criminal gangs to a “cancer” and urged his Latin American counterparts to use military force to root them out.
“We don’t want it spreading,” Trump added.
Following the meeting, Noboa posted a photo on social media of himself standing next to Trump with the words: “For too long, the mafias thought that America was their territory. That they could cross borders, move drugs, guns and [spread] violence without consequences. Their time has run out.”
Since coming to office, Noboa has tried to combat criminal organisations in his country with an iron fist and has declared several states of emergency but nevertheless the murder rate rose by over 30% between 2024 and 2025.
[BBC]
Stew, a 35-year-old from Montana, has enjoyed dabbling in sports bets since he downloaded the Kalshi app about 18 months ago.
But just a few weeks ago, after spotting reports of elevated pizza deliveries around the Pentagon during some late-night scrolling, he made a different kind of bet – wagering $10 (£7.50) on the odds that Iran’s Ayatollah Ali Khamenei would be “out” by 1 March.
It was a trade that tested the limits of the kinds of bets Americans are allowed to make.
So-called predictions markets – overseen by firms such as Kalshi – have exploded in popularity over the last year, hosting more than $44bn in trades.
They are rapidly transforming the betting landscape in the US, where sports betting was largely illegal until 2018 and gambling on elections had been off-limits for years until 2024.
While much of the activity on the platforms revolves around sporting matches, users can speculate on any number of questions, including local elections, whether the US central bank will cut interest rates and the year of Jesus Christ’s return.
The apps caught fire during America’s 2024 presidential campaign, after a legal victory cleared the way for them to accept election bets and they showed the odds tilting toward Donald Trump.
But it is more grisly wagers tied to military action involving Iran, Venezuela and Israel that have drawn attention lately.
In theory, such bets run afoul of US financial rules, which bar trading on contracts involving war, terrorism, assassination, gaming or other illegal activities.
But that hasn’t stopped firms from taking in millions of trades.
Critics have seized on the activity, calling for a crackdown on the apps, which they say are facilitating unseemly, and potentially illegal, war profiteering, generating national security risks and enabling opportunities for insider trading and corruption.
“You have now opened up gambling basically on almost anything and it has turned into this very, very gruesome type of thing on the death of a head of state,” said Craig Holman, government affairs lobbyist at the Public Citizen advocacy group, which recently filed a complaint this week over the bets.
Polymarket alone has hosted what Bloomberg estimated as more than $500m in bets related to the Iran war, at one point offering an opportunity to play the odds on the chance of nuclear detonation.
The company, which is headquartered in New York but operates on a limited basis in the US, eventually removed that market after it drew scrutiny on social media but users can still submit bets on questions like when US forces will enter Iran. It did not respond to the BBC’s request for comment.
Kalshi also ended up cancelling the Khamenei market, which had drawn $54m in trades, noting that US-regulated entities are barred from “having a market directly settling on someone’s death”.
The company, which did not respond to a request for comment for this article, has said the war bets are happening on unregulated exchanges outside the US.
Concerns about the war bets have collided with a bigger battle over how prediction market firms should be regulated.
Unlike traditional gaming firms, in which the odds are set by the company, prediction market companies function more like a stock exchange, allowing users to bet against each other on the outcome of future events using “event contracts”.
That design has allowed national financial regulators at the Commodities Futures Trading Commission (CFTC) to claim oversight.
But critics say they are sports betting and gambling operations trying to dress up as financial exchanges in a bid to avoid stricter rules and taxes faced by traditional gaming firms, which are regulated by the states.
Disagreement over who should be policing the apps has sparked dozens of legal battles across the US, as states start to assert their right to regulate the companies like other gaming firms, rather than leave oversight up to the CFTC.
Even some Republicans have voiced concerns, as traditional gaming firms have also stepped up their lobbying, enlisting a savvy former Trump official, Mick Mulvaney, to plead their case in Washington.
“Nobody is saying that gambling shouldn’t be allowed,” says Ben Schiffrin, director of securities policy at Better Markets, which advocates for financial reforms. “What the states are saying and other advocates are saying is things that are gambling should be regulated as gambling.”
Suspiciously timed bets related to military operations involving Israel, Venezuela and Iran have added fodder to those calls.
In recent weeks, Democrats have introduced legislation to bar federal officials from trading event contracts, pointing to incidents such as when a gambler new to Polymarket made nearly half a million dollars on the capture of Venezuela’s president just before it was officially announced.
They have also issued alerts to consumers about the risks of insider trading and written to the administration urging it to more clearly enforce the rules against wagering on war.
But the odds of a crackdown remain long.
Though the Biden administration had taken a hard line on the sector, proposing to ban sports and politics-related event contracts, that regulatory drive stalled after a court defeat and the 2024 election of Donald Trump, who came to power promising a lighter hand.
Last month, the CFTC said it would withdraw the proposed ban on sports and election related contracts.
It has also taken the side of prediction market firms in the legal fights they are facing in the states, which Michael Selig, Trump’s chairman of the Commodity Futures Trading Commission, condemned in a recent opinion piece as “overzealous”.
He argued that event contracts served “legitimate economic functions”, allowing businesses to hedge against risks triggered by events.
“It’s clear that Americans like the product and want to participate,” he said, while also emphasising that platforms must still follow rules.
As the pressure mounts, Polymarket has announced steps to more formally police suspicious activity, while Kalshi, which advertises its status as a “regulated exchange”, has become more vocal about what it is doing to combat insider trading.
It recently announced punishments in two cases of insider trading and disclosed that it had opened up 200 investigations over the last year.
The company also ultimately cancelled the $54m market around Khamenei’s ouster.
In series of statements explaining the decision, the firm said it did not “list markets directly tied to death”, noting that its terms had included that carve-out.
It promised to make the terms more clear from the get-go, saying it had “learned a lot” from the incident.
But in an indication of growing pains, the decision still sparked outrage among users, including Stew, who said the firm had initially “buried” those rules and its explanation seemed disingenuous, given that there were “only a handful of realistic methods” for Khamenei to go.
Stew, who received a refund, said he wasn’t sure regulation was the answer, but he was sympathetic to the idea that the debate seemed to be stumbling around semantics.
“They call it contract trading, which I guess technically speaking, that’s what it is. But if we’re all being honest here, it’s still betting,” he said.
[BBC]
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