President Donald Trump has ordered a substantial reduction in Trump South Korea war games, cutting short a 10-day joint exercise just as it began, citing his relationship with North Korean leader Kim Jong Un.
Trump directed Secretary of Defence Pete Hegseth to ‘substantially reduce the Joint Military Exercises’ with South Korea, he announced on Truth Social. He acted the day before the drills were set to begin.
The order came ‘based on my very good relationship with Kim Jong Un, of North Korea,’ Trump said. He also cited the cost of the exercises and argued they ‘send a signal that is totally inappropriate and hostile’ to Pyongyang.
Ulchi Freedom Shield ends early after Trump order
The annual Ulchi Freedom Shield (UFS) exercise began on Monday and had been scheduled to run for 10 days. It will now end on Friday 21 August, CNN reported.
Trump also pointed to South Korea’s reluctance to support the United States in its war with Iran as a further reason for the pullback.
The USS George Washington is moving from the Pacific to the Middle East to replace the USS Abraham Lincoln, Axios reported. That shift leaves the Pacific without a US aircraft carrier. The Lincoln has been at sea for eight straight months, and morale aboard is suffering, CNBC reported.
Iranian leaders sense that the US is growing weary of the conflict and are planning to escalate, some intelligence suggests.
Markets and global economy
Stock markets rose broadly in response to the developments. South Korea’s KOSPI climbed 2.42%, among the stronger performers in Asia. Japan’s Nikkei 225 gained 0.74% and China’s CSI 300 rose 1.61%. India’s Nifty 50 slipped 0.11%.
In the US, S&P 500 futures were up 0.15% in early trading after the index closed down 0.17% on Friday. In Europe, the Stoxx 600 edged up 0.10% and the UK’s FTSE 100 was up 0.08% before lunch.
Brent crude stood at $89 per barrel. Bitcoin was at $63,300.
Foreign money flowed into US stocks by a net $4 billion in the week through last Wednesday, down from $5 billion the prior week, according to Ohsung Kwon and his team at Wells Fargo.
Global shipping chokepoints remain under pressure. Sea cargo through the Strait of Hormuz has slowed to a trickle since the war with Iran began, with only a handful of ships traversing the seaway each day. ‘Red Sea diversions have more than tripled container freight rates,’ Harry Murphy Cruise of Oxford Economics said in a research note. The Strait of Hormuz, the Bosphorus, the Kerch Strait, the Bohai Strait and the Øresund Strait are among chokepoints with no alternative route, Cruise warned: ‘When these close, the trade behind them stops.’
US retail sales fell 0.6% in July, the first decline in nine months, the Commerce Department reported. Analysts at Pantheon Macroeconomics attributed part of the drop to the timing of Amazon’s Prime Day, which fell in June this year rather than July, pulling forward a burst of online spending.
Tech layoffs globally have reached 156,975 this year across 152 companies, according to a count by Trading Platforms. Oracle recorded the largest single cut, axing 25,254 roles. The industry is on pace to exceed its 2025 layoff total.
Ulchi Freedom Shield is now set to conclude on Friday 21 August, CNN reported, leaving the full scope of any future joint exercises between Washington and Seoul to be determined.
