The Economic Warning Shot From a Close US Ally

South Korea is bracing for bleak days. The strong US ally and technology powerhouse ought to be well positioned for a world that now scrutinizes investment along national security lines. That's a fair longer-run prognosis. Seoul, and the Western-leaning parts of Asia, first have to survive the bumps of Trump II.

The central bank, which surprised investors with an interest-rate cut last week, was unusually candid about intensifying trade tensions. With exports accounting for around 40% of gross domestic product, the country certainly has a lot at stake. Officials also spend a lot of time worrying about their currency, the won: It’s Asia's worst performer this year. That they were prepared to put aside those concerns and flag still further reductions in borrowing costs says a lot about fears for the economy.