17/06/2025

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US pushes Vietnam to decouple from China tech

S. Korea to introduce second extra budget SEOUL: South Korea’s government will introduce a second supplementary budget for the year on Thursday, after passing a 13.8 trillion won (RM43 billion) budget in May, to support an economy weighed down by US tariffs and sluggish consumer demand. The budget plan will include spending to help the recovery of people’s livelihoods and will be taken up at a Cabinet meeting, a spokesperson at the presidential office said yesterday. President Lee Jae-myung, who took office on June 4, has argued for expansionary fiscal policy and cash-like handout schemes to boost consumer demand, as the country’s central bank last month slashed this year’s economic growth outlook to 0.8%, nearly half the previous 1.5%. Among specific measures, spending to ease the burden of rising food prices will be included in the plan, Acting Finance Minister Lee Hyoung-il said at a separate meeting on inflation. At the meeting, the government decided to extend tax breaks on oil products by two months to the end of August, in response to a surge in oil prices amid heightened geopolitical tension in the Middle East. Financial support and import quota increases were introduced to stabilise rising food prices, which Lee said were causing “too much pain“, while tax cuts on car purchases were extended until the end of the year to support the auto industry. South Korea’s consumer inflation weakened to a five-month low of 1.9% in May, below the central bank’s medium-term target of 2% and market expectations, as petroleum prices dropped 2.3% from a year earlier, but prices of processed food products jumped 4.1% and dining services rose 3.2%. – Reuters Thai minister confident of negotiating US tariffs to as low as 10% BANGKOK: Thailand’s commerce minister yesterday said his country would have trade talks with the United States and expressed confidence both sides could agree on good terms on tariffs, possibly as low as 10%. Pichai Naripthaphan told reporters he expected the talks would go well. He said Thai and US officials would hold talks this week via video conference, he said, but said a date for talks at a ministerial level had not yet been set. He did not provide details on what would be discussed in the talks or why he thought the tariff level would be lowered from the 36% rate that the US has said it will put on Thai goods. “Don’t worry, we have everything prepared. The negotiation should be successful. “We are in the process of detailing what is involved, but we can’t tell you yet.” Pichai also said export data in May were “good” and would be released on Wednesday. He also called for a weaker baht to support exports and tourism, saying a level of 37-38 per US dollar was an appropriate level. – Reuters

o Hanoi willing to adapt supply chains, but gradually: Source

US demands were seen as “tough” and “difficult” by Vietnamese negotiators. The US also wants Vietnam to crack down on the practice of shipping Chinese goods to America with misleading “Made in Vietnam” labels that draw lower duties – which Vietnam is also trying to heed. The Trade Ministry said on Sunday that a third round of talks last week in Washington ended with progress, but critical issues remain unresolved. Vietnam’s ruling Communist Party chief To Lam intends to meet Trump in the United States, possibly in late June, officials with knowledge of the matter said. No date has been announced for the trip. Local firms attending meetings organised by the Trade Ministry in recent weeks expressed a general willingness to adapt, but many warned that instant changes “would destroy business”, according to one of the sources. Vietnam has been slowly developing an industrial ecosystem with local suppliers but it has a long way to go before it can match China’s advanced supply chains and cheaper pricing, industry executives say. “Vietnam is about 15–20 years behind China in somewhat fully replicating its supply chain scale and sophistication, but it’s catching up fast, especially in key sectors like textiles and electronics,” said Carlo Chiandone, a Vietnam based supply chain expert. Abrupt changes to existing practices may hurt Vietnam’s delicate relationship with China, which is both a major investor in its Southeast Asian neighbour and a source of security concerns. – Reuters

chains and would in turn reduce US dependency on Chinese components,” the person added. The ultimate objective is to speed up US decoupling from Chinese high-tech while increasing Vietnam’s industrial capacity, a second person said, citing virtual reality devices as an example of Vietnam-assembled products that are too dependent on Chinese technology. All sources declined to be identified as the discussions were confidential. Reuters was not able to learn if the US has proposed numerical targets such as caps on Chinese content for “Made in Vietnam” goods or different tariff rates based on the amount of Chinese content. As the US-imposed deadline of July 8 nears before the tariffs take effect, the timing and scope of a possible deal remain unclear. All sources stressed that while the US has made broader requests for Vietnam to reduce its reliance on China, tackling the issue of Chinese high-tech content in exports was a key priority. Last year, China exported around US$44 billion (RM187 billion) of tech such as electronics components, computers and phones to Vietnam, about 30% of its total exports to the country. Vietnam shipped US$33 billion of tech goods to the United States or 28% of the US-bound exports. Both flows are on the rise this year, according to Vietnam’s customs data. Vietnam’s Trade Ministry did not reply to Reuters requests for comment. Separate sources have previously said that

HANOI: The United States is pushing Vietnam in tariff talks to reduce the use of Chinese tech in devices that are assembled in the country before being exported to America, three people briefed on the matter said. Vietnam is home to large manufacturing operations of tech firms such as Apple and Samsung, which often rely on components made in China. Meta and Google also have contractors in Vietnam that produce goods such as virtual reality headsets and smartphones. The Southeast Asian nation has been organising meetings with local businesses to boost the supply of Vietnamese parts, with firms showing willingness to cooperate but also warning they would need time and technology to do so, according to one person with knowledge of the discussions. Donald Trump’s administration has threatened Vietnam with crippling tariffs of 46% which could significantly limit access for Vietnam-made goods to their main market and upend the Communist-run country’s export-oriented growth model. Vietnam has been asked “to reduce its dependency on Chinese high-tech”, said one person familiar with the discussions. “That is part of the restructuring of supply

A container is loaded onto a cargo ship while docked at Hai Phong port in Vietnam. – REUTERSPIC

UN scales back global aid plan due to ‘deepest funding cuts ever’ GENEVA: The United Nations

resources we are given,” Fletcher said. Under the new guidelines, OCHA aid will be directed so that it can “reach the people and places facing the most urgent needs” and support will be directed “on the planning already done for the 2025”. “This will ensure that limited resources are directed where they can do the most good – as quickly as possible,” the statement said. – AFP

13%, that it had requested while facing surging crises in Sudan, Gaza, the Democratic Republic of the Congo and Myanmar, among others. “We have been forced into a triage of human survival,” Fletcher said. “The math is cruel, and the consequences are heartbreaking. “Too many people will not get the support they need, but we will save as many lives as we can with the

Coordination of Humanitarian Affairs (OCHA), said in a statement. “All we ask is 1% of what you chose to spend last year on war. “But this isn’t just an appeal for money – it’s a call for global responsibility, for human solidarity, for a commitment to end the suffering.” With 2025 nearly halfway through, the UN has received only US$5.6 billion out of the US$44 billion, a mere

who assumed office in January, the United States – the world’s top donor – heavily slashed its foreign aid, causing havoc in the humanitarian aid sector across the globe. Other donor countries have cut back their contributions in the face of an uncertain economic outlook. “Brutal funding cuts leave us with brutal choices,”Tom Fletcher, the head of the United Nations Office for the

yesterday said it was drastically scaling back its global humanitarian aid plans due to the “deepest funding cuts ever”. The UN’s humanitarian agency said in a statement that it was seeking US$29 billion (RM123 billion) in funding compared to US$44 billion requested in December, in a “hyper-prioritised” appeal. Under President Donald Trump,