South Korea, Vietnam leaders pledge deeper ties as US tariffs shake up trade

SEOUL – South Korea and Vietnam pledged deeper economic and strategic cooperation as their leaders held a summit on Aug 11, as the export-dependent countries try to shore up longstanding supply chains with US President Donald Trump’s tariffs shaking up global trade.

There was no public discussion of the levies – 15 per cent on South Korean products going to the United States and 20 per cent for Vietnamese goods – as South Korean President Lee Jae Myung hosted Vietnam’s To Lam as his first state guest since taking office in June.

But Mr Trump’s tariffs on products from Asian countries have increased uncertainty over future business commitments, with Vietnamese official data showing a slowdown in new investment.

Mr Lam, who is the Vietnamese Communist Party general secretary, said they agreed to expand trade with each other to US$150 billion (S$193 billion) by 2030 from about US$86.8 billion in 2024, and that Vietnam welcomed an increase in investment by South Korean businesses.

“Our countries agreed that about 10,000 Korean companies operating in Vietnam contribute to Vietnam’s economic development and mutually beneficial cooperation between the two countries.” Mr Lee said in a televised address.

“I asked for a continued interest in the stable economic activities of our companies in Vietnam.”

Mr Lam led a delegation of industry, trade, foreign and technology ministers and senior party and Parliament members on the four-day state visit.

The two countries signed 10 memoranda of understanding at the summit meeting, pledging cooperation in nuclear and renewable energy, monetary and financial policies, and science and technology, Mr Lee’s office said.

Other agreements covered cooperation in infrastructure, including high-speed rail, Mr Lee’s office said.

In a speech at South Korea’s Yonsei University, Mr Lam urged South Korean companies to keep investing in Vietnam and warned of the risk of fragmenting supply chains.

“Vietnam welcomes South Korean enterprises to expand their investments in the country, emphasising substantive cooperation in technology,” he said.

He said the countries should make it a top priority to jointly develop semiconductors and make breakthroughs in new materials, calling on South Korea to keep nurturing Vietnamese talent in areas like artificial intelligence, biotechnology and shipbuilding.

A number of major South Korean companies including Samsung Electronics have used Vietnam as an export hub, benefiting for years from lower labour costs, generous tax incentives and Hanoi’s numerous free trade pacts with dozens of countries.

South Korean companies have been cited as potential investors in Vietnam’s planned nuclear energy, LNG power plants and high-speed rail projects. REUTERS