a group of people standing outside of a building© Ahn Young-joon/Associated PressSEOUL—When North Korean dictator Kim Jong Un suggested in a New Year address that his country might be open to participating in the Winter Olympics,
South Korea’s president and top aides quickly convened to craft a friendly response.
U.S. officials, however, weren’t included in those consultations and, to their consternation, were notified just hours before Seoul announced its proposal to Pyongyang for negotiations.
North Korea’s surprise outreach and South Korea’s opening to its northern rival have stirred tensions between Seoul and Washington—despite professed unity in public statements—as the allies work to present a common front in dealing with Pyongyang, according to senior U.S. and South Korean officials.
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“We’re good today, but there are lots of policy tests that we have to manage in the days ahead and then after the Olympics,” said one official familiar with the diplomatic process. “It’s a challenging road.”
Differences were on public display last week when President Donald Trump, in his first State of the Union address, reiterated a call for tough sanctions on North Korea, while omitting mention of the inter-Korean talks and their most prominent outcome: Athletes from both Koreas will march under one flag when the Winter Olympics open Friday in South Korea.
Diplomats and officials in Washington and Seoul have been struggling to manage the complex relationship between the government of South Korean President Moon Jae-in, who has long favored developing ties with the North, and the Trump administration, which aims to strip North Korea of its nuclear weapons by isolating Pyongyang, and has warned it might take military action if North Korea doesn’t agree to give up its nuclear arsenal.
The two allies drew starkly different conclusions from Mr. Kim’s Jan. 1 speech, according to people familiar with the matter.
At the White House, officials were struck by the bellicose talk from Mr. Kim, who ordered the mass production of nuclear warheads and ballistic missiles and called for reunification of the Korean Peninsula, saying he would pursue “the final victory of the revolution.”
By contrast, in the South Korean presidential Blue House, Mr. Moon and his advisers were encouraged by Mr. Kim’s openness to participating in the Olympics and discounted what they considered formulaic tough talk from the North.
Seoul’s subsequent outreach to Pyongyang, cutting the U.S. out of the decision-making process, left U.S. officials particularly frustrated because of Mr. Moon’s repeated demands last year that the U.S. seek his consent before taking any pre-emptive military action against North Korea.
Diplomats at the U.S. Embassy in Seoul, which sits across the street from South Korea’s ministries of Foreign Affairs and Unification, expressed their displeasure to their South Korean counterparts, according to people familiar with the matter.
South Korean officials told the Americans that the immediacy of the coming Winter Olympics left them little choice but to act quickly in response to Mr. Kim’s speech, those people said.
In an effort to chart a path forward, the U.S. and South Korea have taken steps to protect their alliance—moves that also have been marked by strains.
Mr. Trump spoke with Mr. Moon by phone on Jan. 4, and the two agreed to postpone joint annual military exercises until after the end of the Winter Paralympics on March 18. But U.S. officials were still rankled by the fact that Mr. Moon had in December publicly presented the idea of a delay as a South Korean request awaiting U.S. agreement.
U.S. officials said they had actually anticipated the request and quickly signaled their willingness to Seoul. As the divide threatened to widen, Mr. Moon in a Jan. 10 press conference acknowledged a policy gap with the U.S., and sought to ease the strain by giving Mr. Trump credit for creating the opening for the inter-Korean dialogue.
Mr. Trump thanked Mr. Moon for the compliment in a follow-up phone call—the second of two between the leaders in January.
Then, in an unannounced mid-January meeting in San Francisco, Lt. Gen. H.R. McMaster, Mr. Trump’s national security adviser, emphasized to his South Korean and Japanese counterparts the importance of keeping up pressure on North Korea, according to people familiar with the matter.
Gen. McMaster said it was necessary to proceed with exercises and maintain unity in the face of Pyongyang’s attempts to drive a wedge between the U.S. and its Asian allies, the people said.
Seeking to keep relations on track, the U.S. canceled a planned February port visit to South Korea by an attack submarine, the U.S.S. Texas, to assure Seoul that Washington wouldn’t upset the atmosphere for inter-Korean detente, these people said.
The U.S. also gave South Korea a last-minute sanctions waiver on Wednesday to send athletes to a North Korean ski resort for joint training—part of the two Koreas’ Olympics agreement.
Easing U.S. concerns, Seoul agreed with Washington to proceed with the joint exercises as originally envisioned after the Paralympics. However, the U.S. could ratchet up or down the public statements on these exercises, depending on the status of the inter-Korean dialogue and North Korea’s actions.
Geography is one reason fundamental differences remain between Seoul and Washington. While Mr. Trump has vowed not to allow North Korea to develop a missile that can strike the American homeland with a nuclear warhead, South Korea has long lived under the shadow of North Korea’s 1.1 million-person armed forces. Any American military operation would risk turning the South’s bustling capital into a battlefield.
Chatter in Washington that some Trump administration officials are considering a limited “bloody nose” strike on North Korea, together with the withdrawal last week of nominee Victor Cha to fill the yearlong vacancy as U.S. ambassador to Seoul, has also led to confusion and frustration inside South Korea’s government, according to people familiar with the matter. Mr. Cha has since written that he disagrees with the idea of a preventive military strike.
“This city was once completely destroyed. No Korean is interested in seeing that happen again—period,” said an official at South Korea’s Blue House. If there is war, the official said, “The cost will have to be borne by us.”
On Friday, Joseph Yun, the State Department’s top official on North Korea issues, began a series of meetings in Seoul with various government ministries. Before arriving, he told reporters he didn’t believe the U.S. was close to taking military action.
That same day, Mr. Trump sent a harder message, meeting with a group of eight North Korean defectors in the Oval Office and reaffirming in a phone call with Mr. Moon the importance of “addressing” the two countries’ trade imbalance, which he has said favors South Korea. According to the White House account, Mr. Trump also underscored the importance of dealing with the North Korean human rights issue, a detail that didn’t appear in the Blue House readout, which instead dwelled more on Mr. Trump’s well wishes for a successful Olympics.
Domestic politics is a major factor in recent tensions, too. Mr. Moon, who gained national prominence as the presidential chief of staff during a period of inter-Korean engagement known as the “sunshine” era, took office in May—following the removal of his conservative predecessor—with a pledge to improve ties with North Korea.
Mr. Trump lashed out last year at the South Korean government on several occasions, describing Seoul’s policy in one tweet as one of “appeasement,” while suggesting in another that years of sending aid to North Korea “didn’t work.”
Divisions within the two governments haven’t helped. South Korea’s Foreign Ministry has frequently been cut out of the loop on Mr. Moon’s North Korea policy, U.S. diplomats said. When Mr. Moon met advisers to formulate a response to North Korea’s New Year’s overture, South Korea’s foreign and defense ministers weren’t present, they said.
Seoul’s Foreign Ministry and Defense Ministry declined to comment.
In Washington, Mr. McMaster has emphasized the need to develop limited military options in case the confrontation with North Korea can’t be resolved peacefully, while Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson have repeatedly underscored the need for diplomacy.
Vice President Mike Pence will lead the U.S. delegation to the Olympics. South Korean officials are hoping, one official said, that he will talk more about prospects for peace—and less about North Korea’s bad behavior.
Write to Jonathan Cheng at jonathan.cheng@wsj.com
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