US Engages in Semiconductor and Mineral Deals with Vietnam, Boosts Diplomatic Status Amid China Concerns
In a significant diplomatic development, President Joe Biden successfully sealed two crucial agreements with Vietnam, strengthening ties in the semiconductor and mineral sectors. This milestone comes as Vietnam elevates the United States to its highest diplomatic status, alongside China and Russia. The move signals Washington’s recognition of Vietnam’s strategic importance in securing global supply chains against potential risks originating from China.
During his visit to Hanoi, President Biden acknowledged the remarkable progress made in the bilateral relationship over the past 50 years. He emphasized the importance of the partnership with Vietnam as the United States seeks to demonstrate its commitment to the Indo-Pacific region. Biden shared with reporters that he had also discussed stability with Chinese President Xi Jinping’s deputy at the recent G20 summit.
Vietnam finds itself delicately navigating the tensions between the United States and China, aiming to carve out its own position as a low-cost manufacturing hub in the international arena. In an effort to maintain good relations with all superpowers, Vietnam is set to welcome top Chinese officials, possibly including President Xi Jinping, in the coming days or weeks.
Vietnam’s longstanding relationship with Russia faces challenges as it actively engages in talks with Moscow over a new arms supply deal, which could potentially trigger US sanctions due to the ongoing conflict in Ukraine. Recently disclosed documents reveal discussions for an $8 billion credit facility that Russia may extend to Vietnam to purchase heavy weaponry, including anti-ship missiles, aircraft, and fighter jets. While Vietnam is open to exploring various arms suppliers, including the United States, the nation seeks to reduce its military dependence on Russia, a relationship that has become increasingly uncomfortable.
The upgrade in US-Vietnam relations, as stated by Jon Finer, the US principal deputy national security adviser, encompasses a security dimension. Finer indicated that the United States and its partners are willing to assist Vietnam in diversifying its military supplies away from Russia, an offer that Vietnam seems receptive to.
President Biden’s visit is taking place against a backdrop of intensifying territorial disputes between Vietnam and China in the South China Sea. Additionally, Vietnam Airlines is expected to sign an initial agreement for the purchase of approximately 50 Boeing 737 Max jets, valued at $10 billion, coinciding with the president’s trip.
Furthermore, Vietnam’s significant role as a destination for friendshoring by US technology companies is underscored by the presence of executives from Google, Intel, Amkor, Marvell, GlobalFoundries, and Boeing, who are scheduled to meet with Vietnamese tech executives and Secretary of State Antony Blinken in Hanoi on Monday.
As bilateral trade and investment ties continue to grow, Vietnam is increasingly asserting its position on the global stage. This latest development signifies the deepening relationship between the United States and Vietnam, while Vietnam seeks to navigate its diplomatic relations with multiple world powers. With the new agreements in place, Vietnam is poised to enhance its presence as a crucial player in global supply chains while diversifying its military sources.
