Why this:
$query = "SET NAMES 'utf8'";
$query = str_replace("'", "\'", $query);
$pdo->query($query);
Would cause problem?
I’m currently getting this error:
You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near '\'utf8\''
If I don’t escape it, everything’s fine, but the problem exists with further queries!
The sql you are trying to run is perfectly safe as is, it contains no user input and as such can be run without escaping.
Also you are actually escaping the delimiters of a string, not the value of the string itself.