Given the impacts of international politics, South Korea's foreign economic relations have been bogged down in a dangerous dilemma marked by being besieged on four sides, namely South Korea's relations with China, Japan, North Korea and the United States have been in difficulties simultaneously for different reasons. What is even worse, fundamentals of South Korea's economy have been weakening and all economic indicators going downward. Given that South Korea's exports fell for the 13th consecutive month in December 2019, the Bank of Korea revised its prediction of South Korea's economic growth rate of 2019 to 2 percent, a big drop from its prediction of 2.7 percent in October 2018. The 2019 figure marks the lowest since 2009. At start of 2020, the coronavirus outbreak threatens to further hit the fragile Korean economy. President Moon Jae-in's approval rating thus has dropped down to around 40 percent. The purpose of this paper is first to analyze why the Moon Jae-in's diplomacy is undergoing a daunting test and how diplomatic crises affect South Korea's economy, then Moon Jae-in's approach to South Korea's economic challenges in an era of uncertainty, finally followed by author's policy recommendations.