In U.S. Support of South Korea, an Economic Danger Looms

The U.S. public needs to be careful what it wishes for. The great majority of Americans support the use of the U.S. military if South Korea is attacked by North Korea. Should America be pulled into the conflict, which could involve a countries beyond Korea’s borders, markets could easily be panicked and thrown into a tailspin, with the effects moving quickly into the broader economy.

New data from Gallup show:

If North Korea were to attack South Korea, as increasingly seems to be a possibility with the recent threats and actions of North Korean leaders, the majority of Americans (55%) say the United States should use its military forces to help defend the South, while 34% say the U.S. should not do so.

The United States has more than 28,000 military personnel in South Korea. The numbers in Japan and throughout the balance of the region are much larger. The U.S. naval base in Yokosuka, Japan, is American’s largest installation in Asia. And U.S. officials have sent new missile systems to Guam and the destroyer USS John S. McCain into the region. None of these things matter without U.S. popular support, which will make Washington’s decisions about the aggressive defense of South Korea easier.

A war on the Korean peninsula, even if only a “small” one, would roil equities and energy prices at the very least. A larger conflict would rattle the investment markets deeply, which in turn almost certainly would cause a sharp sell-off in equities. Fuel prices also would rise quickly as oil would trade higher. Crude has a tendency to rocket up when there is a global disaster, usually on supply worries. The amount of wealth created by the markets in the past year would be threatened, and with that, the larger economy.

Based on the risks, both militarily and to the economy, the public’s support of South Korea is all the more impressive. However, that impressive support may cost the United States more that the public can guess.

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Methodology: Results are based on telephone interviews with 1,025 national adults, aged 18 and older, conducted April 2 to 3, 2013.

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