South Korea votes to pick its next president with Trump comments a factor

Key Points
  • South Korea was headed to the polls on Tuesday to pick its next president in an election already likely swayed by Trump rhetoric.
  • Moon Jae-in of the Democratic Party of Korea appeared to be the front-runner after Trump's rhetoric on THAAD and the free trade deal drew South Koreans' ire.
Moon Jae-in's poll numbers will determine his mandate: Professor
Moon Jae-in's poll numbers will determine his mandate: Professor

South Koreans went to the polls on Tuesday, in an election that may have already swayed under bombastic rhetoric from U.S. President Donald Trump.

The scales appeared to have tipped in favour of Moon Jae-in of the Democratic Party of Korea, which local media said was polling at around 35-40 percent of the vote, after comments from Trump in a Reuters interview late last month.

Ahn Cheol-soo, the candidate of the People's Party, and ultra-conservative Liberty Party of Korea's Hong Joon-pyo were polling at around 18 percent each, according to media reports.

Polls will close at 8 p.m. Seoul time, with results expected as early as around 2 a.m. Seoul time. Financial markets in South Korea will be shut on Tuesday.

In the interview, Trump shocked the longstanding U.S. ally and trading partner with two unexpected announcements: He wants Seoul to pay for the THAAD missile defense system the U.S. is deploying there, and he wants to renegotiate the existing free trade agreement between the two countries.

A woman looks at posters of presidential candidates ahead of the election in South Korea on May 9, 2017.
Jonathan Stayton | CNBC

Last month, even before Trump boosted ire in the country, South Korean protesters had already begun demonstrating against what they saw as a U.S. rush to get THAAD deployed before the election.

Moon is a liberal who has opposed THAAD and supports more engagement with the North, rather than relying on economic sanctions.

His opponent, centrist candidate Ahn Cheol-soo, supports a more traditional, tougher diplomatic path, including reviving the six-party talks.

Analysts pointed to the potential for the election to herald a shift in diplomatic relations.

"Moon's win could potentially result in cooling relations with the U.S. or even opening up conflicts," Ho Woei Chan, an economist at Singapore bank UOB, said in a note on Monday, citing the likelihood he would soften his country's policy on North Korea and revisit the THAAD deployment.

"Moon has also advocated for South Korean leadership on issues in the Korean peninsula and to reopen the Kaesong Industrial Complex in North Korea," Ho said.

Can a new South Korean government ease tensions with the North?
Can a new South Korean government ease tensions with the North?

Kim Byoung-Joo, adjunct professor at Hankuk University of Foreign Studies, told CNBC's "Squawk Box" on Tuesday that if the polls are correct and Moon wins a majority of votes, the proportion of votes will be closely watched.

"I think he was leading the polls [with] about 40 percent, and if he gets the votes over 40 percent or not will a very big question because it will really mean a lot about his mandates," Kim said.
"The number of votes will pretty much determine overall the initial course of his presidency," he said.

"If he gets more votes than 40 percent, it will probably mean that he will have a stronger mandate and he will have a greater confidence to push ahead with the policies that he has been talking about," Kim said. "But if he gets anything below 40 percent, he will have to reach out and embrace the center of the political curve, if you will, and he has to be more accommodating of the centralist desire about how flexible he will have to be."

Kim was less concerned about Moon's stance on North Korea, expecting that if he wins, the candidate will need to adjust his policy positions to be more in line with Washington's.

But Goldman Sachs noted that based on opinion polls, if Moon is elected, he could be heading to the Blue House with the lowest electoral support level for any candidate since 1987.

"Should Mr. Moon be elected to the presidency, the win would be the first by a progressive candidate since December 2002, and the first switch to a progressive presidency from a conservative one since December 1997," Goldman said in a note on Friday.

Early voting began on May 4, with local media reports indicating that as much as 26 percent of the electorate may have already cast a ballot.

The country's domestic politics were already in disarray after President Park Geun-hye was impeached and indicted for alleged corruption, with charges including accepting bribes and extorting businesses.

She was forced from office after months of large, peaceful protests.

-- Evelyn Cheng contributed to this article.

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Moon Jae-in's poll numbers will determine his mandate: Professor
Moon Jae-in's poll numbers will determine his mandate: Professor