US President Joe Biden has solidified agreements with Vietnam on semiconductors and minerals as Vietnam grants Washington top diplomatic status alongside China and Russia.
For months, the US has sought this upgrade, considering Vietnam vital in securing global supply chains and reducing China-related risks.
Biden’s visit to Hanoi marked 50 years since the Cold War conflict, with a ceremony hosted by the ruling Party.
Vietnam seeks a balance between the US and China amid warming US-Vietnam relations and expected visits from top Chinese officials.
Vietnam’s ties with Russia are tested amid discussions of an $8 billion credit facility for heavy weaponry, triggering potential US sanctions.
Vietnam is also in arms talks with the US to diversify away from Russian military supplies. The upgrade includes a security dimension to reduce Vietnam’s reliance on Moscow.
Biden’s visit coincides with growing trade ties, territorial disputes with China, and US tech companies’ interest in Vietnam.
Semiconductors take center stage in the action plan during Biden’s visit. The US may allocate a portion of the $100 million annually for five years under the CHIPS Act to support Vietnam’s semiconductor supply chain.
The deal includes support for training skilled workers due to Vietnam’s engineer shortage in the chip sector.
Strengthening critical mineral supply chains, especially rare earths, is a priority. Vietnam holds the world’s second-largest rare earth deposits after China. An agreement on rare earths is expected during Biden’s visit, but details are limited.
Human rights concerns persist, with US officials criticizing Vietnam’s handling of activists and freedom of expression.
Diplomats suggest activists may be released as a goodwill gesture.