South Korean President Lee Jae-myung assumes office with a bulging in-tray, from a deepening economic slump and global trade war to mounting concerns over military ties between nuclear-armed North Korea and Russia.

And just hours after Lee took office, South Korea's crucial steel and aluminium exports are set to be hit by steep levies of 50 percent as part of US President Donald Trump's tariff bonanza.

AFP takes a look at what Lee will have to deal with as president:

Trade tensions

Chief among Lee's priorities will be steering South Korea's export-dependent economy -- Asia's fourth largest -- through economic turmoil sparked by the tariffs Trump has imposed on US trading partners.

"One of South Korea's major export items is aluminium and steel," Kim Dae-jong, a professor at Sejong University, told AFP, adding that the tariffs could worsen "the already sluggish domestic economy".

South Korea was the fourth largest exporter of steel to the United States last year, accounting for 13 percent of its total steel imports.

With the US doubling Wednesday its tariffs on imported aluminium and steel, Seoul will need to work quickly to shield its economy from the headwinds.

Lee is seen by his supporters as a pragmatic and effective negotiator, with over a decade of experience as a city mayor and provincial governor.

"Political leadership is crucial at times like this. And with an elected president, a phone call with Trump could improve the situation significantly," Kim added.

On the campaign trail, Lee said Seoul needs to "start negotiations on tariffs immediately" with the Trump administration, but also stressed there was no need to "rush" a deal.

Nefarious neighbor

Lee's Democratic Party has taken a relatively dovish approach to North Korea in the past, with former president Moon Jae-in holding several historic summits with Pyongyang's leader Kim Jong Un — and Trump. 

But Moon's efforts to normalize ties failed and the North has since bolstered relations with Russia, sent at least 14,000 troops to help Moscow's war in Ukraine, and declared the South its enemy state.

Lee has hinted that he will take a different approach compared to hawkish Yoon, under whom inter-Korean ties fell to their worst point in years.

On the campaign trail, Lee accused Yoon of deliberately provoking the North to justify his martial law bid — prompting backlash from conservatives.

During Yoon's administration, North Korea blew up roads and railways connecting it to the South and erected what looked like walls near the border.

"Wasn't it out of fear that the South might push up with tanks that North Korea built those tank barriers?" Lee said.

Superpower standoff

Lee's tenure begins as South Korea finds itself in the middle of a growing superpower standoff between the United States, its traditional security guarantor, and China, its largest trade partner.

US Secretary of Defense Pete Hegseth in May warned Beijing was "credibly preparing to potentially use military force to alter the balance of power in the Indo-Pacific."

He called on US allies in Asia such as Seoul to boost their defenses in the face of mounting threats.

Lee, however, has suggested his country should pursue friendlier ties with Beijing, a long-time backer of Pyongyang.

He drew backlash last year by saying he would say "xie xie" — thank you in Chinese — to both China and the self-ruled island of Taiwan in the event of a conflict involving the two.

When asked during the campaign by TIME magazine whether he would come to Taiwan's aid if it were attacked by Beijing, Lee said: "I will think about that answer when aliens are about to invade the earth."

Polarized politics

Lee must also lead a nation still deeply divided and reeling from the political turmoil triggered by Yoon's martial law bid in December.

If the new center-left administration too aggressively goes after the conservatives, it will "only galvanize the far-rightists, ultimately undermining efforts to reduce political polarization," Gi-Wook Shin, a sociology professor at Stanford University, told AFP.

During the campaign, Lee said he would push to amend the constitution to make it harder to impose martial law.

He also said it was necessary to launch a special investigation to identify those who may have been complicit with Yoon's bid to suspend civilian rule.

Declining birth rate

Lee's administration will also have to deal with one of the world's lowest birth rates, a soaring cost of living and growing inequality.

During the campaign, Lee said the younger generation's "sense of hopelessness" and deepening inequality were the main causes of South Korea's declining fertility rate.

Many young South Koreans are not confident that "their children's lives will be any better than their own".

Lee has pledged to create a shorter work week, extend the retirement age, expand state-led care services for children, people with disabilities and seniors, offer more housing options and increase support for small businesses and young South Koreans, among others.

by Claire LEE