President Lee Jae-Myung’s Plan to Reboot South Korea

It was not how Lee Jae-myung envisioned his first day on the job. Following his election as South Korea’s President on June 3, Lee’s staff arrived at their new offices in central Seoul the next morning to find rooms strewn with trash and desks equipped with monitors but bereft of computers, which had all been piled in a corner. It was a struggle to get doors unlocked and find even basic stationery.

“It was a very busy and chaotic period,” Lee, 61, tells TIME in his only Western media interview since taking office. “I thought that we had done much preparation in advance, but it was not sufficient.”

Behind the chaos was his disgraced predecessor, Yoon Suk-yeol, whose December declaration of martial law plunged the East Asian nation of 50 million into six months of political paralysis that concluded with Yoon’s impeachment—and, after a snap poll, Lee’s election. 

Just over 100 days on, the new leader has moved with such speed that the chaos he encountered on his first day seems like a distant memory. In Seoul, one of the world’s most densely populated cities, he has imposed a 600 million won ($430,000) cap on mortgage loans for property purchases to quell an overheated housing market. A new labor law, meanwhile, has reduced legal liabilities for striking workers, and some $10 billion of cash vouchers ranging from $110 to $330 have been distributed to every citizen, depending on income, to boost local businesses. 

“One of my biggest accomplishments is that South Korea’s domestic political situation has been stabilized,” he says.

For all the action at home, perhaps his greatest challenge was external: the turbulence caused by Yoon’s martial law declaration meant that South Korea languished half a year behind other nations in negotiating a new trade deal with the Trump Administration. Seoul and Washington have had a free-trade agreement since 2012, and last year South Korea sent cars worth $34.74 billion to the U.S.—accounting for about half of the Asian nation’s auto exports, a figure that plummeted when the Trump Administration imposed levies of 25%. On July 31, Lee negotiated a reduction to 15% in exchange for pledges to invest $350 billion in the U.S. and other concessions.

It was a critical milestone—and one that is central to Lee’s plan to reenergize a moribund economy. The home of world-leading firms such as Samsung, Hyundai, and LG spent decades at technology’s vanguard, but fortunes have wilted in recent years because of a stifling regulatory environment, demographic pressures, and fierce competition from China. After years of steady decline, South Korea’s GDP grew by only 2% in 2024, less than half the Asia-Pacific average.

Lee, who has hiked spending on science and technology by almost 20%, wants to turn things around by creating a “super innovation economy.” His government, he says, will invest $71.5 billion over the next five years to transform South Korea into one of the top three AI nations worldwide. And in July, Tesla inked a $16.5 billion deal to produce AI chips at Samsung’s new semiconductor foundry in Texas. 

Geopolitically, Lee wants to position South Korea as a “bridge” between East and West. Leaders of Lee’s progressive Democratic Party have traditionally been closer to China, hostile toward former colonizer Japan, and kept the U.S. at arm’s length. Lee, however, pointedly made Tokyo his first foreign visit en route to Washington and pledged to work “as partners” with Japan’s Prime Minister in the neighbors’ first joint statement in 17 years. 

Lee’s actions are meant to reboot South Korea. The West may think of his nation in terms of space-age technology and zeitgeist-defining cultural phenomena like KPop Demon Hunters, though in truth South Korea battles the lowest birth rate, top suicide rate, and highest youth unemployment of any developed nation. Lee is clear-eyed about the stakes. South Korea is in “a very serious crisis,” he says. “To address these issues, we need to bring our economy back on track for growth and increase opportunities for our people.”

His pitch is that securing South Korean prosperity and boosting its role in sensitive supply chains can help regional security too. In October, South Korea hosts the Asia-Pacific Economic Cooperation for the first time in 20 years, and Lee hopes the event—due to be attended by the leaders of both the U.S. and China—can catalyze his nation’s return to Asia’s top table.

However, threading the needle will not be easy. On the same day Lee sat down with TIME in Seoul, less than 600 miles away Chinese President Xi Jinping welcomed Russia’s Vladimir Putin and North Korea’s Kim Jong Un to Beijing to commemorate 80 years since the end of World War II. Other dignitaries included the leaders of Iran, Belarus, and Myanmar—a motley cohort dubbed the “axis of upheaval” by the Western press—in a clear rebuke to the U.S.-led order. “I think China wanted me to attend, but I didn’t ask further,” laughs Lee.

Against this backdrop, critics say Lee may be tilting too close to historic ally the U.S. But there are also questions whether Washington remains a reliable partner, not least since the arrest by ICE officials of over 300 South Korean workers at a Hyundai Motor–LG car-battery factory in Georgia on Sept. 4, which prompted Lee’s Foreign Ministry to express “concern and regret.”

Lee, however, insists South Korea remains well-placed to act as a “bridge of exchanges and cooperation” in the region by cementing ties with the White House. “We will stand together with the U.S. in the new global order, as well as supply chains centered on the U.S., but there is a need for us to manage our relationship with China so as not to antagonize them.” Otherwise, Lee concedes, there’s “a risk that South Korea could become the front line of a battle between two different blocs.”

Much like his nation, rising from among the world’s poorest following the Korean War to ninth biggest economy in 2020 (it is 13th today), Lee’s life was poised for a remarkable turnaround. Despite no formal secondary education, he was accepted to law school and passed the national bar exam immediately after graduation. Following a period immersed in human- and labor-rights cases, he entered politics, serving first as Seongnam city mayor, and then later as governor of Gyeonggi province. He ran for President in 2022—but lost to Yoon by 0.7%. 

Now finally in office, he faces economic headwinds. Alongside lackluster growth, South Korea’s national debt has surged to $930 billion over the past year, raising questions about his ambitions to transform his nation into an AI superpower. Next year’s budget includes funding for 150,000 GPUs, or processors specialized for AI. But it isn’t even clear that South Korea’s creaking electricity grid, which is struggling to meet the country’s current needs, can keep up with Lee’s ambitions. 

Lee has also courted criticism for pardoning controversial allies, and over a formal apology for the 2016 shutdown of the Kaesong Industrial Complex—where South Korean factories could access North Korean labor by the shared border. Though South Korea’s then President Park Geun-hye halted operations in response to North Korea’s fourth nuclear test, the new statement explicitly absolves Pyongyang of any responsibility, and has been framed by conservatives as kowtowing to the Kim regime.

A combination of these and other factors led Lee’s approval rating to fall from 63% in late July to 51% in mid-August. It has since rebounded to its previous high. The trigger? Lee’s successful courtship of—and negotiation with—Donald Trump. 

The South Korean leader played his hand deftly, arriving at the White House on Aug. 25 with a golf putter customized for Trump’s stature and engraved with his name, two cowboy hats emblazoned with make america great again, as well as a foot-long model of an ironclad turtle ship to symbolize Korea’s shipbuilding traditions. When the U.S. Commander in Chief took a liking to Lee’s pen, that was proffered too.

Then there were the compliments: about the Oval Office’s gaudy new decor, a surging stock market, Trump’s diplomatic prowess. “Many wars in Europe, in Asia, in Africa, and in the Middle East are coming to peace because of the role that you are playing,” Lee gushed.

There had been a sense of trepidation going into the meeting, with Trump posting on Truth Social just hours earlier: “WHAT IS GOING ON IN SOUTH KOREA?” and hinting at a “Purge or Revolution,” in reference to investigations into ex-President Yoon. Lee’s team feared they might be walking into the kind of ambush sprung on Ukraine’s Volodymyr Zelensky or South Africa’s Cyril Ramaphosa. In the end, things were cordial, with Trump praising Lee as “a very good guy.” It helped, of course, that other than encomiums Lee brought hard cash—half a trillion dollars of it. Aside from the $350 billion already agreed to, Lee unveiled an additional $150 billion of investments in the U.S., including Korean Air Lines’ buying $50 billion in Boeing.

But behind the scenes Lee faced tough questions about the $350 billion investment fund he had put together for the U.S. Would it be all cash? And who would swallow any losses from the investments? The U.S. demands were so strict that “if I were to agree then I would be impeached!” says Lee. “So I asked the U.S. negotiating team for a reasonable alternative.”

With no agreement on these issues, it was perhaps unsurprising that Lee focused on praising Trump for his prior diplomatic success with Kim Jong Un, while urging him to re-engage with Pyongyang. Trump met three times with North Korea’s leader, including at the demilitarized zone that has split the peninsula since the 1950–53 Korean War. However, his budding bromance with Kim exploded dramatically at a summit in Hanoi in 2019, when both leaders left early while blaming each other for the failure to build on an earlier consensus on “denuclearization” achieved at a prior summit in Singapore. 

For Lee, pushing for South Korean engagement is not without risk. Public opinion turned against his Democratic Party predecessor Moon Jae-in precisely because he appeared preoccupied with concessions to their Stalinist neighbors. Yet rekindling diplomacy’s greatest soap opera with Kim is something that does interest the U.S. President, who told reporters “I’d like to meet him this year.” And indulging Trump on Kim could help Lee downplay bugbears with Seoul. “Lee probably brought up North Korea to take Trump’s attention away from the trade and investment issues,” says Naomi Chi, a professor at Hokkaido University. 

Trump’s yearning after a Nobel Peace Prize is no secret—Israel, Pakistan, and Cambodia have nominated him so far—and Lee may use that chimera to keep Trump onside. It’s also a diplomatic push that would necessitate engaging Pyongyang’s chief sponsor Beijing, possibly lowering the temperature between the world’s top two economies and elevating South Korea’s global standing as Lee’s “bridge.” Asked whether he would nominate Trump for a Nobel Peace Prize for rapprochement with the North, Lee replied that “if there is concrete progress on this issue ... there is no other person who would deserve that prize.”

The problem is defining progress. Few believe Kim would countenance relinquishing his nuclear deterrence, given the fates of Libyan leader Colonel Muammar Gaddafi and Iraq’s Saddam Hussein, both toppled after abandoning their weapons programs. “The best the U.S. could hope for is nuclear arms talks, not denuclearization,” says Kim Chol-min, a Seoul-based North Korean defector who used to handle the leadership’s secret funds and uses a pseudonym for security. “All sanctions lifted in return for partial destruction of nuclear weapons.”

But rolling back the strict U.N. sanctions regime imposed in 2017, which has rendered economic cooperation between Seoul and Pyongyang virtually impossible, would be hugely controversial. Still, a focus on arms control makes sense. North Korea is estimated to wield at least 50 nuclear bombs and may have the capacity to produce 10 to 20 annually. Lee points out how North Korea agreed in 1994 to freeze its nuclear program in exchange for heavy oil and light water reactors. (The deal collapsed in 2003.) He advocates “negotiations to partially ease or lift sanctions” on North Korea in exchange for a three-stage process: arms suspension, reduction, and finally denuclearization. “And I believe that President Trump would be on the same page.” 

Of course, any deal depends on North Korea’s willingness to sit down. But today the regime is flush with an estimated $20 billion reaped from arms sales to aid Putin’s war in Ukraine, and Lee’s conciliatory measures have been met with scornful ripostes. Last year, Kim symbolically demolished the Arch of Reunification in Pyongyang while his influential sister Kim Yo Jong dismissed Lee’s remarks about restoring inter-Korea trust as “a fancy and pipe dream.” 

In the end, even failure may serve a purpose. While Trump’s previous North Korea engagement flopped by any objective measure, it probably didn’t in the mind of the former reality-TV star, for whom success is measured in column inches, breaking-news alerts, and shattered protocol. We live at a moment when flattery is strategy, and Lee’s providing Trump the stage he craves may be a canny act of distraction diplomacy from a leader who knows more than most about beating the odds.