The Korean War led to the endorsement of NSC 68, vast expenditures for arms in Asia and in Europe, and the overextension of American power. American intervention in Korea was the most dramatic test to that date for containment. Although questions about the origins of the war linger, Truman and his advisers speedily concluded that North Korea had attacked South Korea, that Stalin had approved and planned the attack, and that the North Korean invasion was a Soviet test of American credibility and a possible preliminary to Soviet probes elsewhere—in Europe, perhaps in Germany. "This could be the Greece of the Far East," Truman declared to an associate.
Many later analysts would stress, in contrast to the dominant 1950s interpretation, that this shooting war had occurred in the context of an ongoing civil war since 1948 between the two parts of the then-recently divided Korea, and some historians would later argue that the Korean War was, in many ways, part of a revolution in Korea. According to such a view, the Korean War was primarily a war between Koreans, for the unification of Korea, and later evidence indicated that Stalin had even been reluctant to endorse the North's desire to attack. According to such evidence, Stalin had been wary and cautious, greatly fearing the commitment of Soviet power and prestige to the North's aim to unite Korea.
In late June 1950, over the course of just a few days, President Truman quickly expanded the American commitment and sent ground forces to assist the embattled South Koreans. At the time, his was a popular decision in the United States, even though he did not ask for a declaration of war. Kennan, among other advisers, agreed that "we would have to act with all necessary force to repel this attack." He had already urged that the United States should prepare for limited war, and Korea became the test case of his own counsel. The Kremlin, he concluded, had unleashed its puppets to try to block America's peace treaty with Japan and to exploit the opportunity in Korea created by America's withdrawal of troops. A major concern of Soviet policy, he reaffirmed in 1951, was "to make sure that it filled every nook and cranny available…. There was no objective reason to assume that the Soviet leaders would leave the Korean nook unfilled if they thought they had a chance of filling it at relatively little risk to themselves and saw time running out." Containment, then, could mean "counterforce" by military means—precisely what Kennan claimed the "X" essay did not counsel; and the military test was in Asia, not Europe, which had been Kennan's preeminent concern.
Late in June 1950, after President Truman had committed the U.S. Air Force to the war in Korea but the day before the president committed ground troops there, Kennan assessed the likelihood of direct Soviet military involvement in the war. He thought that such intervention was unlikely, and that the possibility of the Soviets at that time attacking the United States was "remote." He did not believe, he explained, that the Soviets had the military capacity, but, according to the declassified minutes, he "thought if the Russians got into a world war now they would have stumbled in, and in the long run this might be the best situation for us."
In July 1950, Kennan agreed with others in the government that the air force should operate beyond the Thirty-eighth Parallel, but thought that American war aims should be sharply limited: restoration of the status quo ante. Unfortunately, the Truman administration wanted to achieve more and would not negotiate in July 1950, when the Chinese accepted an Indian proposal for a settlement of this nature. Casting aside Kennan's counsel, U.S. policymakers rejected India's proposal, partly because it "would leave South Korea defenseless [before] a renewed North Korean attack." Even before U.S. ground troops crossed the Thirty-eighth Parallel in October 1950 and moved toward the debacle near the Chinese border in late November, Kennan urged caution lest the United States overextend its lines and "frighten the Russians" into war. Unlike many policymakers then, he was content to limit the commitment of American power, not to try to "liberate" North Korea, but simply to stop what he later defined as a civil war ("'aggression' … was as misplaced here as it was to be later in … Vietnam"), and thereby to restrict containment. Kennan lost to Acheson and Truman, who wished to move beyond containment to "roll back" and "liberation." Korea, they then said, could not be "half slave and half free."
When in the fall and early winter of 1950–1951, the People's Republic of China sent in "volunteers," who pushed back U.S. troops and killed thousands of GI's, American policymakers promptly abandoned "liberation" and shifted back to containment. Some even denied that their war aims had ever included unification of the recently split nation and the vanquishing of communism there.
Relying on the strategy of containment, Truman and Acheson in early 1952, in opposition to their top-level military advisers, made decisions—involving mostly the insistence on voluntary repatriation of prisoners of war—that dragged out the armistice negotiations for more than fifteen months. That Truman-Acheson decision to insist on voluntary repatriation, instead of the standard procedure of automatic repatriation, was devised to give the United States a symbolic victory by establishing the unwillingness of many captured Chinese and Korean POWs to return to their communist homelands. According to Acheson, this new standard of voluntary repatriation might well stop communist nations in the future from going to war, lest their soldiers, when guaranteed voluntary repatriation, quickly surrender in order to flee communism.