A U.S. defense official said the U.S. didn't foresee China's economic retaliation against South Korea when Seoul decided to house the U.S. THAAD missile defense system.

That's according to Chad Sbragia, the U.S. deputy assistant secretary of defense for China, at a virtual seminar hosted by the Washington-based Institute for Corean-American Studies on Monday.

While declining to get into the specifics of actions taken to reverse Beijing's retaliatory measures, Sbragia emphasized that it served as a reason for the U.S. to "improve and build closer relations with Indo-Pacific partners."

The official added that the retaliation has been a "powerful driver" for a change in the U.S. strategy toward China and for U.S. allies in the Indo-Pacific region to form a network.

This comes as the U.S. has been increasingly pushing for what is known as the "Quad Plus," a NATO-like multilateral structure that builds on the Quadrilateral Security Dialogue talks between Australia, India, Japan and the U.S.