Since last July, China has been blocking a variety of South Korean goods and services from entering its market, in sectors from cosmetics and hardware to air travel and tourism. The cause of its actions appears to be Washington and Seoul’s decision that month to deploy the Terminal High Altitude Area Defense system to South Korea. The two allies argue that THAAD is designed to counter North Korean attacks, whereas Chinese officials paint the missile defense system as a tool whose radar could be used to snoop on China’s own arsenal of missiles, undermining the country’s nuclear deterrent.
Over the fall and winter, as South Korea descended into a political corruption scandal that eventually led to the impeachment of President Park Geun-hye, Beijing stepped up its economic coercion, appearing to take advantage of the domestic uncertainty in Seoul in a bid to undermine its security cooperation with Washington. Since then, Beijing has kept up the pressure. If China succeeds—or even appears to succeed—in blocking THAAD, it could set a dangerous precedent, emboldening Chinese policymakers to expand their use of economic leverage as a coercive tool against China's other trading partners. To counter this risk, the administration of U.S. President Donald Trump should continue to strengthen its cooperation with Seoul on North Korea and work toward THAAD’s deployment, while at the same time trying to reassure China that the missile defense system does not undermine China’s nuclear deterrent. It should also look for opportunities to raise the costs of Beijing’s coercive behavior.
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The current spat is not the first instance of economic friction between China and South Korea. During the so-called Great Garlic War, between 2000 and 2002, China banned imports of South Korean cell phones and the common plastic polyethylene in response to tariffs that Seoul had imposed on Chinese garlic exports. In 2013, tensions between the two countries flared over a Chinese measure that effectively blocked imports of South Korean kimchi