Hanoi reform plans alarm Korean firms

South Korean companies, including Samsung Electronics, are worried about Vietnam's plan to reform incentives for the high-tech sector, warning it could lead to higher costs for foreign investors and potentially undermine new investment, Korean officials have said.

- FRANCESCO GUARASCIO

The warning comes amid continued uncertainty about Vietnam's trade relations with the United States, its biggest export market. In addition to a 20% duty on imports from Vietnam applied since August, the White House has threatened 40% duties on goods relying on foreign components and possible tariffs on electronics, a sector dominated in Vietnam by Korean manufacturers.

For decades, South Korea has been one of the biggest investors in Vietnam, with total investment worth $92 billion at the end of 2024, roughly one-fifth of Vietnam's gross domestic product. Samsung, the largest investor, accounts for more than one-tenth of Vietnam's exports, and makes 60% of the phones it sells globally in Vietnam.

In an address to Vietnam's Prime Minister Pham Minh Chinh at a public event on Monday, the head of the Korean Chamber of Commerce (Kocham) in Vietnam raised concerns about changes to a high-tech law which "may substantially affect the investment incentives previously granted."

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