President Barack Obama Proclaimed the U.S. Defense Strategic Review entitled “Sustaining U.S. Global leadership: Priorities for 21st Century Defense, Defense Strategic guidance” at the Pentagon on Jan 4, 2012. The U.S. made it clear that East Asia is critical for the U.S. to pursue its national interests in economic, foreign affairs, and security areas. The paper examined the background of the U.S. pivot to East Asia and policy to China. Then the paper continues to address the U.S. new defense policy`s substance, implications and China`s response. Finally, the paper explored the U.S. return to East Asia`s impact on the Korean peninsula as well as South Korea. The paper also made policy recommendations for South Korea considering the U.S. new policy toward East Asia. There are several factors which influence the policy-making process related to the pivot to East Asia. First, the U.S. did not realize the seriousness of rising China and its influence to neighboring countries while the U.S. was deeply involved in waging wars in Iraq and Afghanistan. Second, the U.S. eventually became aware of the criticality of East Asian markets to overcome the economic challenge the U.S. is still facing. At the same time, the neighboring countries which have worsened perception towards China due to its assertive behaviour in the past several years expect the U.S. to get deeply involved in Asian affairs. The new U.S. defense policy as the new national strategy which resulted from its threat perception and strategic requirements strive to prioritize Asia in parallel with preventing over-intervention based on the principle of selection and concentration. The U.S. developed the military strategy to realize the concept by adopting a new paradigm of war. The military strategy is characteristic of cutting-edge joint forces equipped with ground, maritime, air operation and cyber warfare by preventing massive ground intervention. Four priorities for the U.S. defense are as follows: first, victory for the on-going global war on terrorism; second, prevention and deterrence of conflict; third, defeat the enemy and cope with diverse contingencies; finally, preservation and reinforcement. The U.S. should develop forces which are equipped with agility and flexibility to carry out overlapping dual missions at various spheres while disbanding two major theaters of war. Keeping solid cooperative relations with allies and friendly nations, the U.S. ensures their stable and overseas presence and deployment. What are the implications of the new U.S. defense policy to South Korea and the Korean peninsula as a whole? First, if we disregard the background of U.S. return to East Asia as a tool for coping with the China threat, the U.S. might request South Korea as its ally to cooperatively manage the China threat. Second, U.S. forces in Korea seem highly likely to redeploy their troops to contingencies in East Asia, i.e. strategic flexibility. Additionally, in the event of contingencies on the Korean peninsula, the U.S. will deploy its less augmented forces to the Korean theater. Finally, the U.S. will reduce 487 billion dollar defense expenditures within the next ten years. Therefore, the U.S. might request South Korea for increasing defense burden sharing. Furthermore, the U.S. might request additional costs for base relocation including the USFK and Yongsan garrison. To address these potential challenges, the ROK should first take into serious consideration whether the ROK-U.S. alliance attempt to perceive other countries aside from North Korea as its common enemy is beneficial to its national interests. Second, the ROK forces should take the lead in conducting ground operations in the event of another Korean war. The potential change of combined forces structure should enable the ROK to redefine how to fight. Imbalances in military structure and war-fighting assets should be rearranged according to the new U.S. defense policy. Third, additional defense burden sharing might be inevitable in a sense. Additional USFK relocation cost could be burdensome considering South Korea`s economic recession and rising public pressure to increase the welfare and education budget. However, the ROK should recognize an additional military budget for the self-reliance defense posture. The ROK-led alliance combined defense posture requires two allies to reshape war guidance, war command, war planning and operation planning since it is critical for the transition of wartime operational control. Also, Korean national employees for the U.S. forces in Korea should be managed by the ROK government directly. Finally, in the event of sea lanes threatened by China`s maritime power and territorial dispute between the ROK and China, a naval port should be constructed in the southern area of Jeju Island. The ROK should also closely cooperate with the U.S. and Japan to protect the sea lines of communication. Considering the criticality of the alliance with the U.S. in a security sense, and the significance of the economic relations with China, the ROK should develop a security-economic linkage strategy and international cooperation.