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

According to Reuters, there was no public discussion of the levies – 15% on South Korean products going to the US and 20% 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.

However, 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.

Lam, the Vietnamese Communist Party general secretary, said they had agreed to expand trade with each other to US$150 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,” Lee said in a televised address.

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

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

The countries signed 10 memoranda of understanding, pledging cooperation in areas including nuclear and renewable energy, monetary and financial policies, and science and technology, Lee’s office said.

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

In a speech at South Korea’s Yonsei University, 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,” Lam said.

Lam said the countries should make it a top priority to jointly develop semiconductors and make breakthroughs in new materials, calling on Korea to keep nurturing Vietnamese talent in areas such as AI, biotech 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.