US tariffs are reshaping global trade flows. In response, two export-driven economies — South Korea and Vietnam — are strengthening their partnership. On August 11, 2025, South Korean President Lee Jae Myung hosted To Lam, General Secretary of the Communist Party of Vietnam, in Seoul. Their talks led to agreements in energy, technology, and infrastructure. These moves aim to increase trade and reduce the risks caused by changing US trade policies.
Since the late 2010s, the United States has used tariffs to protect domestic industries. Initially, they targeted steel and aluminum. Later, they expanded to electronics, semiconductors, and automobiles. While China was the main focus, the measures soon affected key US allies, including South Korea. Vietnam, which benefited during the US–China trade war, now faces indirect impacts through supply chain changes and slower demand.
Exports drive both economies. South Korea’s shipments equal around 40% of GDP. Vietnam’s exports are more than 100% of GDP, showing its role as a manufacturing hub. In mid-2025, Washington introduced new tariffs on Asian imports. These covered electronics, textiles, and industrial machinery. As a result, the need to diversify markets has grown urgent. South Korea could see $12 billion of its exports hit. Vietnam’s exposure is about $8 billion, especially in apparel, footwear, and electronics.
The summit upgraded ties between the two nations. It built on their Comprehensive Strategic Partnership, launched in 2022. Leaders signed agreements in several areas:
South Korea is Vietnam’s top investor, with $92 billion invested by 2024. This funding has created jobs and supported industrial growth. Companies like Samsung, LG, and POSCO operate major plants in Vietnam. Their products range from smartphones to steel. These operations link Vietnam to global markets. The new agreements will likely expand into high-tech manufacturing and green energy.
Vietnam aims to become the next “Asian tiger.” The government is reforming its business environment and investing in skilled labor. It is also offering incentives for research and development. These steps match South Korea’s need for stable and cost-effective production bases. Given the uncertainty of US tariffs, this strategy is more important than ever.
Tariffs cause ripple effects across Asia. Companies adjust supply chains to reduce exposure. For example, many South Korean firms are moving some production to Vietnam. Others use dual sourcing to split orders across countries. Meanwhile, businesses change where they buy raw materials to meet trade agreement rules and avoid higher duties.
Energy is central to the partnership. Vietnam needs more electricity to fuel industrial growth. South Korea seeks export markets for its nuclear and green technology. Together, they plan wind farms, solar parks, smart grids, and hydrogen projects. These could cut Vietnam’s coal use and help South Korea meet climate goals.
The countries will upgrade Vietnam’s ports and highways. They will also develop industrial clusters connected to rail and sea routes. South Korean builders are expected to play a big role. Better infrastructure will speed up trade and strengthen Vietnam’s role as an ASEAN gateway.
The aim is to grow bilateral trade from $100 billion in 2024 to $150 billion by 2030. To succeed, both sides will need policy support and close monitoring. They will hold annual ministerial meetings to track progress. These will also address challenges caused by new US tariffs or global market shifts.
This model may inspire other export-focused economies. Thailand, Malaysia, and Indonesia are also exploring deeper partnerships. Stronger intra-Asian trade can reduce vulnerability to major market shocks. It also supports technology sharing and investment flows within the region.
Economists agree that diversification is key. “When US tariffs hit your main exports, you must find other demand,” said Dr. Kim Hyeon in Seoul. “Vietnam offers a growing market and a reliable production base.” In Hanoi, Nguyen Thi Lan added: “This partnership blends South Korea’s technology and Vietnam’s labor and location. It is a clear win-win.”
There are still risks. Regulations differ between the two countries. Infrastructure gaps remain. Regional competition is strong. Geopolitical tensions, especially between the US and China, could create further uncertainty. Meeting trade goals will require skilled workers, tech transfer, and coordinated policy.
The August 2025 agreements between South Korea and Vietnam show a proactive approach to the impact of US tariffs. By focusing on energy, infrastructure, and technology, they aim to build a stronger and more resilient partnership. This could help both economies weather future trade disruptions and maintain growth in an uncertain world. Stay informed with the latest Forex trading news and analysis. Visit our website now at: https://fixiomarkets.com/en/prex-blogs
South Korea and Vietnam boost trade to counter US tariffs, signing deals in energy, tech, and infrastructure to strengthen economic ties.
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