SEOUL — South Korea’s new liberal President Lee Jae-myung pledged on Wednesday to raise the country from the near destruction caused by a martial law attempt and revive an economy besieged by global protectionism that is threatening its very existence.

Mr. Lee’s decisive victory in Tuesday’s snap election stands to usher in a sea change in Asia’s fourth-largest economy, after backlash against a botched attempt at military rule brought down Yoon Suk Yeol just three years into his troubled presidency.

He faces what could be the most daunting set of challenges for a South Korean leader in nearly three decades, ranging from healing a country deeply scarred by the martial law attempt to tackling unpredictable protectionist moves by the United States, a major trading partner and a security ally.

“A Lee Jae-myung government will be a pragmatic pro-market government,” he said after taking the oath of office at parliament, a location where six months ago he jumped over the perimeter wall to enter the chamber and avoid martial law troops barricading it to vote down the decree.

He promised deregulation to spur innovation and growth in business and pledged to reopen dialogue with North Korea while maintaining a strong security alliance with the United States and bringing balance to diplomacy.

“It is better to win without fighting than to win in a fight, and peace with no need to fight is the best security,” he said on the country’s often violent ties with rival North Korea.

Mr. Lee was officially confirmed earlier as president by the National Election Commission and immediately assumed the powers of the presidency and commander-in-chief, speaking with the top military leader to receive a report on defense posture.

With all the ballots counted, Mr. Lee won 49.42% of the nearly 35 million votes cast while conservative rival Kim Moon-soo took 41.15% in the polls that brought the highest turnout for a presidential election since 1997, official data showed.

Mr. Lee has said he would address urgent economic challenges facing the country on the first day in office with a focus on the cost-of-living concerns affecting middle and low-income families and the struggles of small business owners.

“With democracy alive, I hope the president will revive the economy, and have consideration for underprivileged citizens and small business owners,” said Kim Eun-kyung, 58, a Seoul resident.

The new president also faces a deadline set by the White House on negotiating import duties that Washington has blamed for a large trade imbalance between the countries.

South Korean stocks rallied on Wednesday, with the benchmark KOSPI rising more than 2% to a 10-month high, with the financial sector leading the gain on expectations of market reform by Mr. Lee. Renewable energy stocks also rose. Mr. Lee has pledged a shift to a greener energy mix.

‘DEAL WITH TRUMP’
In a bid to fill a long-running power vacuum, Lee nominated Kim Min-seok, a four-time lawmaker, as his prime minister on Tuesday.

Mr. Kim made waves when he predicted in August last year that Mr. Yoon may declare martial law, roughly three months before Mr. Yoon’s short-lived decree to impose martial law.

The government under a caretaker acting president had made little progress in trying to assuage crushing tariffs announced by US President Donald J. Trump that would hit some of the country’s major industries, including autos and steel.

“President Lee will find himself with little to no time to spare before tackling the most important task of his early presidency: reaching a deal with Trump,” the Washington-based Center for Strategic and International Studies said.

US Secretary of State Marco Rubio congratulated Mr. Lee on his election win and said the countries “share an ironclad commitment” to their alliance grounded on shared values, and deep economic ties.

The White House said the election of Lee was “free and fair” but the United States remained concerned and opposed to Chinese interference and influence in democracies around the world, according to a White House official.

Mr. Lee has expressed more conciliatory plans for ties with China and North Korea, in particular singling out the importance of China as a major trading partner while indicating reluctance to take a firm stance on security tensions in the Taiwan Strait.

Still, Mr. Lee has pledged to continue Mr. Yoon’s engagement with Japan and said the alliance with the United States is the backbone of South Korea’s global diplomacy. — Reuters

ALARM over China’s stranglehold on critical minerals grew on Tuesday as global automakers joined their US counterparts to complain that restrictions by China on exports of rare earth alloys, mixtures and magnets could cause production delays and outages without a quick solution.

German automakers became the latest to warn that China’s export restrictions threaten to shut down production and rattle their local economies, following a similar complaint from an Indian electric vehicle maker last week.

China’s decision in April to suspend exports of a wide range of rare earths and related magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.

The move underscores China’s dominance of the critical mineral industry and is seen as leverage by China in its ongoing trade war with US President Donald J. Trump.

Mr. Trump has sought to redefine the trading relationship with the US’ top economic rival China by imposing steep tariffs on billions of dollars of imported goods in hopes of narrowing a wide trade deficit and bringing back lost manufacturing.

Mr. Trump imposed tariffs as high as 145% against China only to scale them back after stock, bond and currency markets revolted over the sweeping nature of the levies. China has responded with its own tariffs and is leveraging its dominance in key supply chains to persuade Mr. Trump to back down.

Mr. Trump and Chinese President Xi Jinping are expected to talk this week, White House Spokeswoman Karoline Leavitt told reporters on Tuesday, and the export curbs are expected to be high on the agenda.

“I can assure you that the administration is actively monitoring China’s compliance with the Geneva trade agreement,” she said. “Our administration officials continue to be engaged in correspondence with their Chinese counterparts.”

Mr. Trump has previously signaled that China’s slow pace of easing the critical mineral export controls represents a violation of the agreement reached last month in Geneva.

MAGNETS HELD UP AT CHINESE PORTS
Shipments of the magnets, essential for assembling everything from cars and drones to robots and missiles, have been halted at many Chinese ports while license applications make their way through the Chinese regulatory system.

The restrictions have triggered anxiety in corporate boardrooms and nations’ capitals -— from Tokyo to Washington — as officials scrambled to identify limited alternative options amid fears that production of new automobiles and other items could grind to a halt by summer’s end.

“If the situation is not changed quickly, production delays and even production outages can no longer be ruled out,” Hildegard Mueller, head of Germany’s auto lobby, told Reuters on Tuesday.

Chinese state media reported last week that China was considering relaxing the curbs for European semiconductor firms while the Ministry of Foreign Affairs has said it would strengthen cooperation with other countries over its controls.

However, rare-earth magnet exports from China halved in April as exporters grappled with the opaque licensing scheme.

Frank Fannon, a minerals industry consultant and former US assistant secretary of state for energy resources during Mr. Trump’s first term, said the global disruptions are not shocking to those paying attention.

“I don’t think anyone should be surprised how this is playing out. We have a production challenge (in the US) and we need to leverage our whole of government approach to secure resources and ramp up domestic capability as soon as possible. The time horizon to do this was yesterday,” Mr. Fannon said.

Diplomats, automakers and other executives from India, Japan and Europe were urgently seeking meetings with Beijing officials to push for faster approval of rare earth magnet exports, sources told Reuters, as shortages threatened to halt global supply chains.

A business delegation from Japan will visit Beijing in early June to meet the Ministry of Commerce over the curbs, and European diplomats from countries with big auto industries have also sought “emergency” meetings with Chinese officials in recent weeks, Reuters reported.

India, where Bajaj Auto warned that any further delays in securing the supply of rare earth magnets from China could “seriously impact” electric vehicle production, is organizing a trip for auto executives in the next two to three weeks.

In May, the head of the trade group representing General Motors, Toyota, Volkswagen and other major automakers raised similar concerns in a letter to the Trump administration.

“Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras,” the Alliance for Automotive Innovation wrote in the letter. — Reuters

NEW DELHI — Proliferating conflict zones are an increasing burden on airline operations and profitability, executives say, as carriers grapple with missiles and drones, airspace closures, location spoofing and the shoot-down of another passenger flight.

Airlines are racking up costs and losing market share from cancelled flights and expensive re-routings, often at short notice. The aviation industry, which prides itself on its safety performance, is investing more in data and security planning.

“Flight planning in this kind of environment is extremely difficult… The airline industry thrives on predictability, and the absence of this will always drive greater cost,” said Guy Murray, who leads aviation security at European carrier TUI Airline.

With increasing airspace closures around Russia and Ukraine, throughout the Middle East, between India and Pakistan and in parts of Africa, airlines are left with fewer route options.

“Compared to five years ago, more than half of the countries being overflown on a typical Europe-Asia flight would now need to be carefully reviewed before each flight,” said Mark Zee, founder of OPSGROUP, a membership-based organization that shares flight risk information.

The Israeli-Palestinian conflict in the Middle East since October 2023 led to commercial aviation sharing the skies with short-notice barrages of drones and missiles across major flight paths — some of which were reportedly close enough to be seen by pilots and passengers.

Russian airports, including in Moscow, are now regularly shut down for brief periods due to drone activity, while interference with navigation systems, known as global positioning  system spoofing or jamming, is surging around political fault lines worldwide.

When hostilities broke out between India and Pakistan last month, the neighbors blocked each other’s aircraft from their respective airspace.

“Airspace should not be used as a retaliatory tool, but it is,” Nick Careen, International Air Transport Association (IATA) senior vice-president for operations, safety and security, told reporters at the airline body’s annual meeting in New Delhi on Tuesday.

Isidre Porqueras, chief operating officer at Indian carrier IndiGo said the recent diversions were undoing efforts to reduce emissions and increase airline efficiencies.

WORST-CASE SCENARIO
Finances aside, civil aviation’s worst-case scenario is a plane being hit, accidentally or intentionally, by weaponry.

In December, an Azerbaijan Airlines flight crashed in Kazakhstan, killing 38 people. The plane was accidentally shot down by Russian air defenses, according to Azerbaijan’s president and Reuters sources.

In October, a cargo plane was shot down in Sudan, killing five people.

Six commercial aircraft have been shot down, with three near-misses since 2001, according to aviation risk consultancy Osprey Flight Solutions.

Governments need to share information more effectively to keep civil aviation secure as conflict zones proliferate, IATA Director General Willie Walsh said this week.

Safety statistics used by the commercial aviation industry show a steady decline in accidents over the past two decades, but these do not include security-related incidents such as being hit by weaponry.

IATA said in February that accidents and incidents related to conflict zones were a top concern for aviation safety requiring urgent global coordination.

TOUGH CHOICES
Each airline decides where to travel based on a patchwork of government notices, security advisers, and information-sharing between carriers and states, leading to divergent policies.

The closure of Russian airspace to most Western carriers since the outbreak of war in Ukraine in 2022 put them at a cost disadvantage compared to airlines from places like China, India and the Middle East that continue to take shorter northern routes that need less fuel and fewer crew.

Shifting risk calculations mean Singapore Airlines’ flight SQ326 from Singapore to Amsterdam has used three different routes into Europe in just over a year, Flightradar24 tracking data shows.

When reciprocal missile and drone attacks broke out between Iran and Israel in April 2024, it started crossing previously avoided Afghanistan instead of Iran.

Last month, its route shifted again to avoid Pakistan’s airspace as conflict escalated between India and Pakistan. Flight SQ326 now reaches Europe via the Persian Gulf and Iraq. Singapore Airlines did not respond immediately to a request for comment.

Pilots and flight attendants are also worried about how the patchwork of shifting risk might impact their safety.

“IATA says airlines should decide if it’s safe to fly over conflict zones, not regulators. But history shows commercial pressures can cloud those decisions,” said Paul Reuter, vice-president of the European Cockpit Association, which represents pilots.

Flight crew typically have the right to refuse a trip due to concerns about airspace, whether over weather or conflict zones, IATA Security Head Careen said.

“Most airlines, in fact, I would say the vast majority of them, do not want crew on an aircraft if they don’t feel comfortable flying,” he said. — Reuters