US sets up missile defense in S. Korea as North shows power

A South Korean army’s K1A2 tank fires during S.Korea-U.S. joint military live-fire drills at Seungjin Fire Training Field in Pocheon

In a defiant bit of timing, South Korea announced yesterday that key parts of a contentious U.S. missile defense system have been installed a day after rival North Korea showed off its military power.

The South’s trumpeting of progress in setting up the Terminal High-Altitude Area Defense system, or THAAD, comes as high-powered U.S. military assets converge on the Korean Peninsula and as a combative North Korea signals possible nuclear and missile testing.

North Korea conducted live-fire artillery drills on Tuesday, the 85th anniversary of the founding of its million-person strong Korean People’s Army. On the same day, a U.S. guided-missile submarine docked in South Korea. And the USS Carl Vinson aircraft carrier is also headed toward the peninsula for a joint exercise with South Korea.

The moves to set up THAAD within this year have angered not only North Korea, but also China, the country that the Trump administration hopes to work with to rid the North of nuclear weapons. China, which has grown increasingly frustrated with its ally Pyongyang, and Russia see the system’s powerful radars as a security threat.

South Korea said in a statement that unspecified parts of THAAD were installed. The statement said that Seoul and Washington have been pushing to get THAAD quickly working to cope with North Korea’s advancing nuclear and missile threats. According to Yonhap news agency, the parts include two or three launchers, intercept missiles and a radar.

About 8,000 police officers were mobilized, and the main road leading up to the site in the country’s southeast was blocked earlier yesterday, Yonhap reported. About 200 residents and protesters rallied against THAAD in front of a local community center, some hurling plastic water bottles.

On Tuesday, North Korea conducted what it called its largest ever combined live-fire drills, near the east coast port city of Wonsan.

North Korea’s official media reported that leader Kim Jong Un personally observed the exercises, which involved the firing of more than 300 large-caliber artillery pieces and included submarine torpedo-attacks on mock enemy warships.

Along with sending U.S. military assets to the region in a show of force, President Donald Trump is leaning on China to exert economic pressure on its wayward ally. Chinese President Xi Jinping, who spoke to Trump on Monday, is urging restraint from both Pyongyang and Washington.

In Washington, top Trump administration officials are due to brief the entire U.S. Senate today [Macqu time]. A rapid tempo of North Korean weapons testing in the past year has pushed Kim Jong Un’s authoritarian nation closer to developing a nuclear-tipped missile that could reach the U.S. mainland.

Republican Sen. Lindsey Graham voiced confidence that Trump won’t allow North Korea to reach that point. Graham, a defense hawk who dined with Trump on Monday night, said the North should not underestimate the president’s resolve.

The USS Michigan, a nuclear-powered submarine, arrived Tuesday at the South Korean port of Busan for what was described as a routine visit to rest crew and load supplies. The U.S. 7th Fleet said two American destroyers were conducting simultaneous maritime exercises with naval ships from South Korea and Japan.

North Korea routinely accuses the United States of readying for an invasion, and threatens pre-emptive strikes to stop it. An unnamed North Korean Foreign Ministry spokesman said the U.S. administration’s policy to maximize pressure on North Korea was “little short of lighting the fuse of total war,” the state news agency reported Tuesday.

The streets of Pyongyang, however, were quiet for Tuesday’s anniversary, which was overshadowed by April 15 celebrations for the birthday of the nation’s late founder Kim Il Sung, and were marked by a missile test the following day.

The Trump administration is also upping the ante diplomatically.

On Friday, Secretary of State Rex Tillerson will chair a special meeting of the U.N. Security Council.

Tillerson will be “very vocal” about nations enforcing sanctions on North Korea, State Department spokesman Mark Toner said. Trump said Monday the council must be prepared to impose stronger sanctions. Foster Klug, Seoul

US deployment claims another victim: Hyundai Motor

Hyundai Motor Co. reported yesterday more than a 20 percent drop in its first quarter profit as the anti-Korean sentiment in China sparked by the deployment of the U.S. missile defense system battered the Korean carmakers’ sales in its biggest auto market.

The company said its January-March net profit was 1.3 trillion won (USD1.2 billion), down 21 percent from 1.7 trillion won a year earlier.

Its profit slide was smaller than what analysts expected. FactSet, a financial data provider, said the market consensus was 1.22 trillion won.

Sales rose 5 percent to 23.4 trillion won ($20.8 billion). Operating profit fell 7 percent to 1.3 trillion won.

The biggest drag in earnings was the U.S. missile system that triggered China’s anger and hurt Korean businesses in the world’s most populous country.

Hyundai Motor, the maker of Tucson sports utility vehicles and Sonata sedans, said it sold 206,000 cars in China during the first three months, down 14 percent from a year earlier.

In January and February, Hyundai appeared to have been on track for sales recovery in China. That changed when South Korea’s Defense Ministry signed an agreement with Lotte Group in late February to use its golf course in the southwest to deploy the missile defense system, known as THAAD. In March, Hyundai saw a sharp fall in its China car sales.

“Such sales fall is not due to the internal factor as you know. It is the result of the anti-Korean sentiment that flared up within China since late February and some rivals that launched marketing to exploit the anti-Korean sentiment,” said Koo Zayong, a vice president at Hyundai Motor.

South Korea and the U.S. say THAAD is a deterrent against North Korean aggression, but China opposed it because it worries that its powerful radars could peer through its territory.

China has shown its displeasure in other areas too. The once-steady inflows of Chinese tourists to South Korea withered, and Lotte was ordered to stop operations of its big discount chains in China, which cited safety violations. Instances of anti-Korean sentiments also emerged on Chinese social media and some South Korean schools canceled their trips to China.

Hyundai’s performance in the U.S., its second-biggest market, also dropped 3 percent, outweighing growth in Western Europe and India.

Hyundai Motor was also hit by massive recalls it estimated to cost around 200 billion won ($178 million) during the first quarter. Earlier this month, Hyundai and Kia recalled 1.4 million cars in U.S., Canada and South Korea due to possible engine failures. AP