World Geostrategic Insights interview with Stephen R. Nagy on the trilateral trade negotiations between China, Japan, and South Korea; Japan’s complex relationship with China and its evolving power and diplomatic strategy; the prospect for relations between China and South Korea; and Trump’s impact on Indo-Pacific alliances.
Dr. Stephen R. Nagy is Professor of Politics and International Studies at the International Christian University, specializing in Indo-Pacific geopolitics and great power competition. Concurrently, he holds strategic appointments as Senior Fellow at the MacDonald Laurier Institute, Research Fellow at the Canadian Global Affairs Institute, and Visiting Fellow at the Japan Institute for International Affairs
Q1 – On March 30, China, Japan, and South Korea held their first trade negotiations in five years in Seoul. What is your opinion on the significance of such a meeting and its potential economic and geopolitical implications?
A1 – In itself, it was a meeting to move forward on a trilateral free trade agreement between Seoul, Tokyo and Beijing.
While on paper, a Free Free Trade Agreement sounds attractive, in reality, the trade agreement is likely to not go anywhere. The three economies, in many ways, are moving in different directions.
After Japan’s economic bubble burst in the 1980s Japan moved away from signature products such as the Walkman, television screens, cameras and computers to building sophisticated wafers and other products that go inside today’s most sophisticated technologies.
South Korea, on the other hand, picked up the space left by the Japanese, rapidly changing their industrial base to produce those cameras, televisions, computers, and of course, the iconic Galaxy phone.
China, on the other hand, has invested over the past 40 years in building up industrial capabilities in the core areas that very much compete directly with South Korea’s conglomerates.
Today’s Huawei phone, or Xiaomi phone, electronic vehicles, batteries and many, many other products compete directly with South Korean products at a much more attractive price.
A free trade agreement between the three countries would open up the South Korean economy to direct competition with China’s champions, likely destroying South Korea’s most productive and avant garde products. In this sense, a free trade agreement is not in the interests of South Korea.
It has declining interest for Japan and for China it opens the possibility of further expanding its economy and potentially engaging in a takeover of many of Korea’s signature products.
Q2 – Is Japan recalibrating its foreign policy towards China while equally and while seeking equality and autonomy within its alliance with the United States?
A2 -The Japan China relationship is complex, and every single time top leaders meet, they emphasize the importance of building a constructive and stable relationship.
There are areas where there are some convergences, such as trade, and we see that with both Japan and China joining the Regional Comprehensive Economic Partnership, but there are other areas where there are deep divergence, such as on the issue of peace and stability across the Taiwan Strait, reunification with Taiwan, intellectual property rights, labor law, environmental law, and, of course, the numerous security concerns that exist within the region associated with China, such as China’s support of Russia, and of its invasion of Ukraine, and China’s long term efforts to fundamentally reshape the region’s security architecture in a way that pushes the United States out, and makes neighbors of China deferential to Beijing’s political priorities.
All that being said, Japan continues to view China as an economic opportunity, but also as a chance to find a balance where it can reap benefits while remaining shielded from certain negative aspects. The challenges in the relations between the two countries include economic coercion, monopolization and militarization of supply chains, as well as political instability within China.
Prime Minister Ishiba, Kishida, Suga, and Prime Minister Abe, arguably the strongest Prime Minister in the post world war two period, all understand that China is a neighbor that they will have to live beside, not just for the next five years, But forever. And as a result, they must have a relationship that includes dialogue, cooperation, competition, but at the same time, they want to ensure that they have maximum strategic autonomy vis a vis China.
To do that, that means having the strongest possible relationships with the United States in the form of the US Japan alliance and building other partnerships with other countries, such as Australia, the Philippines and the UK, in the form of reciprocal access agreements, investing in various kinds of trade agreements, such as the Regional Comprehensive Economic Partnership that includes China, as well as the comprehensive progressive Trans Pacific Partnership that excludes China.
Japan is also in its layered process to security, signed the Japan EU Economic Partnership Agreement as well as an infrastructure and connectivity agreement, and continues to diversify its economic, trade, infrastructure and connectivity and technology partnerships to create a layered approach to security.
In this sense, rather than looking towards China and the United States as equals, Japan has continued to try and focus on creating a multi polar Indo Pacific region in which India, ASEAN, Japan, Korea, Australia and the United States represent poles that Pull the center of economic and diplomatic gravity away from China into a multi polar region that provides maximum strategic autonomy for Japan and its interests.
Q3 – Japan has also often been seen as a model of soft power, as opposed to China’s hard power. Has there been an evolution in Japanese power in recent years?
A3 – Japan’s soft power has had a mixed record in many ways. Using both popular culture and traditional culture, Japan has cultivated an image of a society that has modern aspects and traditional aspects, that is developed and peaceful.
Notwithstanding, Japan has been marginalized in the international space, with Japanese Studies programs largely focusing on manga culture, literature, rather than some of the other aspects of Japan, including its political system, its economic system, environmental policies, and of course, its changing security formula within the Indo Pacific region.
In that sense, Japan’s soft power has been a double edged sword, and the one way, providing it some political capital for dealing with the region, on the other hand, marginalizing it in comparison with China’s rapid rise in economic and military power over the past 40 years.
With that in mind, the evolution of Japanese power in recent years has very much focused on diplomacy, primarily through the vehicle of the free and open Indo Pacific vision, or strategy.
This vision has very much focused on building an international order based on rule of law, development through infrastructure and connectivity, enhancing economic exchanges with all kinds of states and acting as an international adapter middle power, connecting states and political entities, such as Taiwan, with political entities and states that do not look so familiar in terms of level of development or political system.
This adapter status has allowed Japan to build a huge platform within the Indo Pacific, contributing to its long term goal of creating a multi polar Indo Pacific region, which pulls the center of gravity away from China in terms of economic power and diplomatic power and distributed more distributes it more equally throughout the region, with states, regions and political entities that share similar interests as Japan.
Q4 – China is committed to maintaining stable relations with South Korea following the impeachment of President Yoon, and it appears to be strengthening ties. For example, China is expected to lift restrictions on K Pop. How do you see the prospects of relations between China and South Korea?
A4 – This is a complicated relationship. China has, in many ways, done the unthinkable by making Japan more popular than China in South Korea. The restrictions on Korean pop as well as other businesses in China after the installation of the THAAD defense system was seen in South Korea as fundamentally unneighborly in the wake of North Korea’s underground nuclear tests, sinking of cruise ships and attacks on villages near the border between the north and south. For many South Koreans, they see China as a rising power with a track record of economic cohesion and bullying and that their prosperity and stability. They believe that China’s rise will come at their expense.
That being said, since the prospects of President Trump being elected in 2024 became much more realistic. We saw China not only reach out to South Korea, but Australia, India and many other countries in an effort to engage what I call the economy of enemies. They wanted to reduce the number of frictional relationships that existed with China before President Trump would come into power, understanding that President Trump would use all levers known and unknown in his unorthodox, typical style, to put pressure on China and to reset the relationship in U.S. favor.
In that sense, South Korea is a benefactor of Trump being elected, in terms of China’s changed tune when it comes to treating South Korea, but we should expect this to change if South Korea takes positions on issues that are important to China, such as Taiwan, that Beijing does not agree with.
Q5 – Donald Trump’s return to the White House has raised concerns about the future of alliances and cooperation indo, Pacific region, particularly with Japan and South Korea, which fear changes in regional dynamics. What’s your opinion? Could cooperation mechanisms such as AUKUS and QUAD be called into question under the new Trump presidency?
A5 – President Trump has brought instability into all parts of the world in terms of his unorthodox approach to relationships in the context of the Indo Pacific and relations with Japan and South Korea.
It appears, so far, that the Trump administration is mostly engaging in continuity with regards to the policies laid out before by the Biden administration, the previous Trump, Trump administration and Obama administration. This means continuing to invest in the system of alliances within the region, but focusing on priority partners such as Japan, South Korea, Australia and the Philippines.
Pete Hegsted, Secretary of Defense’s visit to Tokyo allayed some of the initial concerns of the Trump administration and the potential demands for increased spending by Japan and South Korea on troops.
However, since that visit, we have seen more positive signals that the Trump administration is not fundamentally changing the US position in the Indo Pacific as of yet. They continue to have AUKUS meetings and quadrilateral security dialogue meetings following his election, and we continue to have trilateral cooperation between the US, South Korea and Japan.
What we’re likely to see is that Trump make peripheral adjustments to initiatives such as the Camp David principles, QUAD and AUKUS, in a way that demonstrates to his base that he has made a fundamental change to these relationships that benefit the United States, but also strengthen the United States security positions within the region. These are not necessarily negative for both South Korea and Japan, as both countries are determined to anchor the United States into the region so that they can balance the larger and looming presence of China and its growing military power within the region.
It is still too early to draw conclusions about the Trump presidency: in six to twelve months, we will have a much clearer picture of how Tokyo and Seoul will manage relations with Washington under Trump, and it is from this standpoint that we’ll be able to have a better sense of the anxieties both Japan and South Korea have, but also the potential changes that the Trump administration may bring to the region, both positive and negative.
Dr. Stephen R. Nagy is Professor of Politics and International Studies at the International Christian University, specializing in Indo-Pacific geopolitics and great power competition, serving as a Visiting Fellow for the Hungarian Institute for International Affairs(HIIA), June 13th -August 30th, 2025.
He holds strategic appointments as Senior Fellow at the MacDonald Laurier Institute, Research Fellow at the Canadian Global Affairs Institute, and Visiting Fellow at the Japan Institute for International Affairs. His expertise is further recognized through affiliations with the Institute for Security and Development Policy, the East Asia Security Centre, and the Research Institute for Peace and Security. From 2017-2020, he served as Distinguished Fellow at the Asia Pacific Foundation and is currently senior fellow.
Dr. Nagy serves as the director of policy studies for the Yokosuka Council of Asia Pacific Studies (YCAPS), spearheading their Indo-Pacific Policy Dialogue series. He is currently working on middle-power approaches to great-power competition in the Indo-Pacific. The tentative title for his forthcoming monograph is “Navigating U.S. China Strategic Competition: Japan as an International Adapter Middle Power.”
Link to Dr. Stephen R. Nagy website: https://nagystephen.com/