(Bloomberg) -- South Korean President Yoon Suk Yeol stunned voters, lawmakers and investors by declaring martial law on Tuesday in a high-stakes move he claimed would prevent the opposition from trying to paralyze his administration amid a political rift that is set to deepen markedly.
In an emergency national address televised live, Yoon said he made the decision to protect freedom and constitutional order, and that it will not have an impact on South Korea’s foreign policy. He added that it would also help eradicate the influence of North Korean supporters.
“Through the declaration of martial law, I will rebuild and protect a free South Korea,” Yoon said in a six-minute speech. A proclamation released after the address banned all political activities and strikes and said media would be subject to control of the Martial Law Command, according to Yonhap News.
The move was initially viewed by analysts as a risky political play that was likely to backfire rather than an attempt to return to military-led regimes of the past.
South Korea’s National Assembly Speaker Woo Won-shik called on lawmakers to go the national assembly immediately. In the 300-seat parliament, 190 lawmakers unanimously voted to demand the lifting of the martial law. “I urge the public to trust the parliament and monitor the situation with calm,” Woo said in a statement. It was not immediately clear whether the vote would be binding.
The won suffered its sharpest drop since the global financial crisis to hit 1444.65 its lowest in over two years. Samsung Electronics’ London-listed shares fell as much as 7.2%. The finance minister and central bank chief met and promised to provide unlimited liquidity to markets if needed.
The shock announcement to impose martial law for the first time since the democratization of South Korea in 1987 left even Yoon’s own party blindsided with its leader vowing to stop the move. Yoon’s abrupt decision comes after months of wrangling and deadlock in parliament between the president’s minority government and the main opposition Democratic Party, but with little expectation that the president would take such a drastic step.
The DP is currently trying to force through its own budget proposal through parliament and has submitted an impeachment motion against the chief prosecutor after months of also trying to get Yoon’s wife prosecuted. Meanwhile, the DP’s leader has faced multiple court cases and was convicted last month of election-law violations, barring him from running for president if it is finalized.
Yoon has dealt with the political deadlock in a largely standoffish manner, vetoing a string of bills passed by parliament and at times angering his own party. His latest act ramps up tensions considerably domestically, while also creating high uncertainty abroad for the outlook of one of the world’s key suppliers of semiconductors and tech-related gear.
“Yoon’s declaration of emergency martial law is highly concerning. It marks a stark shift in the administration’s policy,” said Kayla Orta, senior associate at the Hyundai Motor-Korea Foundation Center for Korean History and Public Policy in Washington DC. “Instead of solidifying his political position, this could further damage his domestic standing.”
South Korea’s defense minister ordered a meeting with the military’s top commanders. Broadcaster YTN said martial law would be maintained until the president lifts it, citing a defense official it did not identify.
While Clause 77 of the Constitution says the president must withdraw a martial law declaration after a parliamentary majority demands it, Clause 89 says such an annulment should undergo a review by the cabinet as well.
Earlier YTN showed police restricting entry to the parliament compound as people gathered neared the gate. Aides of lawmakers used fire extinguisher to block soldiers from entering the building.
Even if the martial law order lasts only a day, the political instability it will generate is set to last two or three years, according to Lee Won-Jae, a sociology professor at at Kaist Graduate School of Culture Technology in Daejeon.
The leader of Yoon’s People Power Party condemned the move, in comments that indicated the lack of consultation on the move. He expressed the view that the vote had put an end to Yoon’s order.
“The president’s declaration of martial law is wrong,” Han Dong-hoon, said in a Facebook post. “Martial law has lost its effect, so from this moment on, all state institutions exercising physical force, including the military and police of the Republic of Korea, are obligated not to follow unlawful or unfair instructions,” Han said in a separate post.
Opposition leader Lee Jae-myung urged the military and the police to go back to their posts, saying the declaration was nullified with the parliament’s vote.
“All presidential orders based on the declaration of the martial law are unconstitutional, invalid and illegal,” Lee said, flanked by dozens of lawmakers.
The move comes at a time of high uncertainty for the nation as its trade-dependent economy faces potential tariffs from President-elect Donald Trump’s incoming administration. Bloomberg Economics estimates that full imposition of tariffs on China, South Korea and other US trading partners could reduce Seoul’s exports to the US by as much as 55%.
Meanwhile, North Korea continues to present a security concern as it deepens its ties with Russia, having sent thousands of troops there to help in Moscow’s war against Ukraine. Russia’s defense minister visited Pyongyang last week in the latest sign of talks between the two countries. Russia may help provide North Korea key technology for its weapons programs including its intercontinental ballistic missiles.
“We shouldn’t be fooled - this has nothing at all to do with North Korea and all to do with domestic politics,” said Defense Priorities Fellow Daniel DePetris. “I expect US and UK officials will be getting on the phone to try to convince President Yoon to abide by what the parliament just did.”
US Ambassador to South Korea Philip Goldberg said the US embassy in Seoul and the State Department are closely tracking Yoon’s martial law declaration.
“The situation is fluid,” Goldberg said in an X post, urging citizens to monitor local news sources for updates.
China suggested its citizens residing in South Korea keep calm and try to avoid going outdoors for anything non-essential, the country’s embassy said in a post on social media Tuesday night. The embassy also asked Chinese citizens to comply with official orders from the Korean government and “use caution” over sharing political opinions.
“The domestic uncertainty adds to the external pressures in recent weeks as the market is starting to price in the rise of higher US tariffs under the new Trump administration,” said Aroop Chatterjee, a strategist at Wells Fargo. “Korea is an open economy sensitive to shifts in global export demand and spillovers from a weaker China.”
It is unclear what impact the martial law will have on South Korea’s biggest chipmakers. Nvidia depends mostly on SK Hynix for so-called high-bandwidth memory chips required for its most cutting-edge semiconductors, and whether the South Korean chip firm can continue to supply those high-end memory chips may affect the global AI development.
What Bloomberg Economics Says...
“The declaration of martial law appears to be motivated primarily by domestic politics rather than stresses in the relationship with North Korea.”
— Ben Baris, economist
For the full report, click here
While it remains to be seen if the move will have a lasting impact on markets and the economy, Yoon’s high-stakes move is certain to knock confidence in his leadership and his reliability as a bullwark of democracy in a nation with many authoritarian neighbors.
“US officials look to South Korea now as a beacon of democracy so for a president to pull a fast one like this is certainly shocking and unprecedented.” said DePetris.
--With assistance from Ellen Milligan, Heejin Kim, Sam Kim, Daedo Kim, Yoolim Lee, Kerim Karakaya and Anya Andrianova.
(Adds analyst comments and more details.)
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