In this study, we examine South Korea's foreign policy strategy in the context of the increasing strategic rivalry between the United States and China. We ask why South Korea is relatively hesitant to actively balance against China, especially compared to other US allies like Japan. We present a theory that examines how the lack of territorial and maritime disputes between a US ally and China affects an ally's foreign policy strategy in the US–China rivalry, to explain the case of South Korea. In general, when a US ally is engaged in an ongoing, active territorial and/or maritime dispute with China, we expect the US ally to more actively help the US balance against China. Because bilateral relations between the US ally and China are already tense, the US ally can afford to side with the US without being as vulnerable to Chinese retaliation. On the other hand, when a US ally has no ongoing, active territorial and/or maritime dispute with China, the US ally is expected to be more cautious in siding with the US against China because doing so can provoke China to retaliate in ways more costly than if they already had ongoing disputes. We find that without ongoing, active disputes with China, South Korea is more vulnerable to retaliation by China through critical issues like North Korea and trade. As a result, it is difficult for South Korea to side with the US in actively balancing against China.

While the theory of economic policy offers a potential framework for thinking about the joint pursuit of economic objectives (EOs) and non-economic objectives (NEOs), over time the theory of economic policy was formalized in a way that considers NEOs as constraints that are given, rather than as goals that may themselves be endogenous alongside EOs. We examine the analytical treatment of NEOs as co-determined with EOs, revisiting some of the ground broken by Alan Winters in his analysis of NEOs. We review the place of NEOs in the theory of economic policy, discuss current practice in the representation of such objectives as exogenous constraints, and develop an argument for representation of NEOs as objectives in themselves.

Most of the contemporary policy debate regarding economic interdependence and peace has focused on devising responses either in favor of or in opposition to the prevailing notion that trade is positively and unconditionally correlated with peace. The China and Taiwan case—noteworthy for the simultaneous presence of an ever-increasing economic interdependence and an adversarial political relationship—provides an interesting counterexample to the leading positions in the literature. What is missing in the literature is a model that studies states' decisions to trade and initiate conflict as a function not only of their own utility but also of their perceptions about how their opponent will respond. States' decisions to trade depend on the likelihood that their prospective trade partner will initiate a conflict, and decisions to initiate a conflict depend on perceptions of the likelihood that the target will concede. In this article, the authors develop a model that expands the domain of the trade-peace analysis by endogenizing and analyzing states' decisions to trade and initiate conflicts.