South Korea Vietnam agree to boost economic ties amid looming US tariffs

SEOUL - South Korea and Vietnam agreed to expand economic cooperation after a ministerial meeting on April 14, at a time when the two countries are racing to mitigate the impact of potential US tariffs.

Mr Ahn Duk-geun, South Korea’s industry minister, is visiting Vietnam as the two countries scramble to negotiate a reduction of threatened US tariffs of 25 per cent and 46 per cent, respectively, that would otherwise apply in July after a global moratorium expires.

Korean companies are the biggest foreign investors in Vietnam, and the South-east Asian nation is South Korea’s No. 3 export destination.

The two countries agreed on action plans to ensure they can meet an existing target to reach US$150 billion (S$197.1 billion) in bilateral trade by 2030 and cooperate in the generation of nuclear energy and LNG power and investments in the textile and clothes industries, according to a statement from South Korea’s industry ministry.

The agreement came during a meeting between Mr Ahn and Vietnam’s Trade Minister Nguyen Hong Dien in Hanoi.

Mr Ahn also met representatives of top South Korean companies, including Samsung Electronics, LG Electronics, Hyundai Motor and HS Hyosung. The minister pledged that Seoul will continue talks with both the US and Vietnamese governments to minimise the impact of US tariffs on Korean companies.

Samsung produces more than 60 per cent of its phones sold globally in the country. Led by national champions such as Samsung, South Korean companies have been building their presence in Vietnam for years as the costs of manufacturing in China rose along with political risks and competition.

Now, that reliance on Vietnam threatens to backfire, as the looming steep tariffs exposed the vulnerability of the South-east Asian country’s export model.

China’s President Xi Jinping also on April 14 called for stronger ties with