S Korea, Vietnam leaders pledge closer trade ties
SEOUL: South Korea and Vietnam's leaders pledged to deepen economic cooperation on Monday as their export-dependent countries try to shore up longstanding supply chains as US President Donald Trump's tariffs shake up global trade. There was no public discussion of the levies - 15 percent on South Korean products going to the US and 20 percent 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 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 agreed to expand trade with each other to $150 billion by 2030 - from about $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 a 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, emphasizing 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 like 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 labor 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
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