THAAD Launch
THAAD Launch

US President Donald Trump on Friday said he wants South Korea to pay $1 billion for a missile shield being deployed here, and called for a renegotiation of a bilateral free trade pact.

Amid intense debate at home and diplomatic friction with China, key components of the Terminal High Altitude Area Defense system were brought Wednesday to the planned deployment site in Seongju, North Gyeongsang Province. The US Forces Korea is responsible for the installment and management of the system, while Seoul offered the land.

“I informed South Korea it would be appropriate if they paid. It’s a billion dollar system,” Trump said in an interview with Reuters ahead of his 100th day in office. “It’s phenomenal, shoots missiles right out of the sky.”

Trump’s remarks represent the clearest signal yet he would materialize his commitment to having allies and partners pay what he has called a “fair share” of defense costs.

He also said he will renegotiate or terminate the “horrible” South Korea-US free trade agreement, taking issue with deepening trade deficits.

According to the US Census Bureau, the country’s trade deficit in goods with South Korea rose from $16.6 billion in 2012 to $27.7 billion in 2016.

South Korea’s surplus with the US, meanwhile, soared from $15.2 billion to $23.2 billion during the same period, data from the Korea International Trade Association showed.

South Korea argues automobiles are a small fraction of two-way trade. The country has been seeking to import more energy from the US while encouraging its companies to invest more there.

During a visit to Seoul last week, US Vice President Mike Pence also pledged to “review and reform” the free trade agreement, saying it carries “too many barriers” for American companies.

On the campaign trail, Trump denounced the pact as a “job killer,” especially for the US auto industry.

Trump also said there is a possibility for a “major conflict” with North Korea, though he pursues a diplomatic solution, albeit a difficult one.

“There is a chance that we could end up having a major, major conflict with North Korea. Absolutely,” he said.