South Korea and Vietnam boost their economic ties despite looming US trade tariffs

South Korea and Vietnam have agreed to expand their economic cooperation following a ministerial meet on Monday. This comes at a time of great urgency for both countries to reduce the impact of possible U.S. Tariffs.

Ahn Duk-geun, South Korea's Minister of Industry, is in Vietnam to try and negotiate a reduction in the threatened U.S. Tariffs of 25% or 46% that would apply otherwise after July, when a global moratorium ends.

Vietnam is South Korea's third largest export destination. 3 export destination.

According to a South Korean statement, the two countries have agreed on action plans that will ensure they meet their existing target of $150 billion in bilateral commerce by 2030. They also plan to cooperate in the production of LNG and nuclear energy as well as in investments in the textiles and clothes industries.

The agreement was reached during a Hanoi meeting between Ahn and Vietnam’s Trade Minister Nguyenhong Dien.

Ahn met with top South Korean companies such as Samsung Electronics and LG Electronics. The minister promised that Seoul would continue to hold talks with the U.S. government and the Vietnamese government in order to minimize the impact of U.S. Tariffs on Korean firms.

Samsung manufactures more than 60% its global phones in the country. Korean companies, led by national champions like Samsung, have been expanding their presence in Vietnam since years due to the rising costs of manufacturing in China and political risks.

This reliance on Vietnam is now at risk of backfiring as the steep tariffs that are looming expose the vulnerability in the Southeast Asian nation's export model.

Xi Jinping, the Chinese president, also called on Monday for closer ties with Vietnam in trade and supply chain amid disruptions brought about by U.S. Tariffs. He was kicking off a trip to Southeast Asia that would take him through three countries. (Reporting and editing by Ed Davies.)

(source: Reuters)