South Korea is currently undergoing a challenging political transition, marked by dramatic upheaval and policy paralysis, even as a new president takes office.
In December 2024, then-president Yoon Suk-yeol stunned the world by attempting to impose martial law, a move widely condemned as a power grab or “botched coup” that threw the country into turmoil (Carnegie Endowment).
The backlash was swift: Parliament impeached Yoon days later, and by April 2025, the Constitutional Court had removed him from office, paving the way for an early election. Opposition leader Lee Jae-myung of the Democratic Party (DPK), who had narrowly lost to Yoon in 2022, rode a wave of public backlash against Yoon’s People Power Party (PPP) to win the snap election on June 3, 2025, in what he called a “judgment day” on Yoon’s martial law attempt (Reuters). Nearly 80% of voters turned out - the highest in decades - and Lee’s comfortable 8-point victory over the PPP’s Kim Moon-soo signaled a decisive break with the immediate past. Yet the euphoria of Yoon’s ouster and Lee’s triumph has quickly given way to the sobering reality of a nation still deeply divided and institutions in disarray.
Despite the new leadership, South Korea’s politics remain polarized and partially paralyzed by the trauma of the past months. The attempted authoritarian turn under Yoon shocked the nation and weakened confidence in democratic institutions. Societal divisions are running deep, and Lee has pledged to “unite the people” after the martial law crisis, but public opinion remains split and partisan animosity fierce (BBC).
Nowhere is this polarization more evident than in a growing gender and generational divide: the recent election saw a surge of right-wing sentiments among young men, with roughly three-quarters of male voters in their twenties casting ballots for conservative candidates, while a majority of women in the same age group backed Lee or other progressive candidates.
Meanwhile, politically, the government was run by a series of acting presidents for half a year amid a “debilitating political vacuum”, leaving many state functions unaccounted for (Foreign Affairs). Lee’s incoming team has also criticized the handover of power, describing the presidential office, which was found to be deserted of staff and even basic equipment, as a “graveyard” (Independent).
The economy has emerged as the fiercest policy battleground as Lee Jae-myung takes office amid stark economic headwinds. By some accounts, he faces the toughest economic challenge of any South Korean leader in decades. Growth has slumped badly, and the central bank recently slashed the 2025 GDP growth forecast to a mere 0.8%, a figure not seen in decades.
The international situation offers little relief: global trade wars and protectionism are squeezing South Korea’s export-driven economy, with its two biggest trading partners, the U.S. and China, both reducing imports by implementing trade restrictions. Exports to each of those markets were down to around 8% last month, and South Korean auto exports to the United States have plunged over 30% year-on-year.
Meanwhile, Lee campaigned on a promise to revive the domestic economy for ordinary people, lambasting the previous government’s neglect of working families.
On his first day, he vowed immediate action on “cost-of-living concerns affecting middle and low-income families” and relief for struggling small businesses. The DPK has outlined an ambitious economic recovery plan: ramping up government spending on research & development and artificial intelligence, designating the high-tech defense industry as a new growth engine, and providing stimulus in the form of vouchers to help local merchants.
However, one of the earliest economic showdowns for Lee will be managing trade ties with the United States. Trump’s return to the White House has heightened pressure on Seoul to cut a deal or face steep tariffs after a grace period. Advisers warn that time is nearly up, and by July, U.S. duties on Korean automobiles and other goods could be instituted if no agreement is reached.
Yet Lee has struck a cautious tone. He argues there is “no need to rush” into a bad bargain on tariffs, noting that protectionism is a global trend not limited to Trump. Instead, he advocates diversifying South Korea’s trade partnerships to reduce overreliance on the U.S. and China (Reuters). This pragmatic stance could lead to friction: Korea’s business lobbies and many officials are anxious about immediate losses and may push for a quick compromise with Washington. South Korea—its consumers and business—and its trade partners will have to see how the situation unfolds in the coming months.
National security is another area where Lee’s administration is redefining policies. Yoon Suk-yeol had pursued a more hawkish line, while Lee Jae-myung’s victory brings a liberal shift. He has pledged a return to the Democratic Party’s traditional approach of promoting dialogue with North Korea and seeking a more balanced foreign policy rather than ideological confrontation.
Beyond the Korean Peninsula, Lee must navigate Seoul’s place amid great-power rivalries. Yoon’s government had joined the U.S. in criticizing China’s regional behavior and enhanced military cooperation with Japan, breaking from the more cautious approach of previous liberal administrations. Lee has signaled he will continue close three-way coordination with Washington and Tokyo, for example, by upholding the recent Camp David trilateral agreements that bolstered intelligence-sharing and joint exercises. This nod to continuity is likely to reassure allies.
However, Lee also advocates for “strategic ambiguity” in areas like a potential Taiwan conflict, aiming to avoid any public steps that provoke Beijing (Atlantic Council). “Practical diplomacy centered on national interest” is how Lee describes his doctrine. In practice, this means maintaining the U.S. alliance as the “bedrock” of security, while not unnecessarily antagonizing China or Russia (Foreign Policy).
Perhaps the most defining policy struggle of this transition is Lee Jae-myung’s mission to restore democratic norms and reform powerful institutions, a project that places him against certain interests left from the previous administration. Lee has described the country’s democracy as having been brought to the brink of “near destruction” by the coup attempt, and he used his inaugural address to vow a “revival” of democratic governance. His Democratic Party wasted no time in outlining a sweeping reform agenda targeting the tools Yoon abused. High on the list is curbing presidential emergency powers: Lee’s party has said it will “tightly control the president’s right to declare martial law” so that no future leader can so easily threaten democratic order (Reuters).
Lee’s domestic agenda also seeks to address long-standing social issues that the previous government either exacerbated or failed to resolve. One of these is South Korea’s notorious overwork culture. Yoon’s pro-business administration had controversially floated raising the cap on weekly working hours, sparking public backlash.
Lee is moving in the opposite direction: he has promised to institute a 4.5-day work week to give workers more rest, gradually reducing South Korea’s average work hours toward OECD norms. He also plans to raise the retirement age from 60 to 65 to adapt to an aging society. While labor advocates welcome the shorter workweek proposal, big business groups and conservative economists warn that it could hurt productivity. This policy may become a tug-of-war between Lee’s social welfare objectives and industry’s concerns.
South Korea’s new leadership under Lee Jae-myung is entering office with a bold reformist platform, but into a landscape of opposition and inertia. The tumultuous ouster of Yoon Suk-yeol has resolved one crisis only to bring attention to many others. Lee’s administration has identified the critical policy battles it must fight: reviving a flagging economy, stabilizing foreign policy, and healing fractured institutions.
It commands a parliamentary majority that gives it a rare chance to enact sweeping changes. Nonetheless, only the coming months will show how Lee’s government—and South Korea as a whole—will deal with the challenges currently facing it.