Biden noted steps taken toward better ties.
Hanoi/Washington:
US President Joe Biden on Sunday signed deals with Vietnam on semiconductors and minerals, as the strategic Southeast Asian nation elevated Washington to Hanoi’s highest diplomatic status alongside China and Russia.
The US has been pushing for an upgrade for months as it sees the manufacturing dynamo as a key country in its strategy to protect global supply chains from China-related risks.
Half a century after a protracted and brutal Cold War conflict, Biden arrived in Hanoi for a ceremony organized by the ruling Communist Party, with schoolchildren waving American flags and honor guards carrying bayonetted rifles.
Biden noted steps taken toward better ties.
“We can trace a fifty-year arc of progress between our nations, from conflict, to normalization, to this new, elevated status,” he said.
The partnership with Vietnam is part of the Biden administration’s commitment “to demonstrate to our Indo-Pacific partners and to the world that the United States is a Pacific nation and we are not going anywhere,” he said. Biden to reporters after the meeting in Hanoi. .
Vietnam is in a frosty relationship between Washington and Beijing as the technology and textile exporter seeks its own foothold in international competition to become a low-cost manufacturing hub.
Top Chinese officials, including possibly President Xi Jinping, are expected to visit Vietnam in the coming days or weeks, officials and diplomats said, as Hanoi tries to maintain good relations with all superpowers.
Biden also said in Hanoi that he spoke with Xi’s deputy at the G20, and the two discussed stability.
79-year-old Communist Party Secretary General Nguyen Phu Trong said of the 80-year-old US president’s appearance at the party headquarters: “You haven’t aged a day and I would say you look even better than formerly.”
RUSSIAN ARMS TALK
Vietnam’s long-standing relationship with Russia is being tested over the war in Ukraine, including talks with Moscow over a new arms supply deal that could lead to U.S. sanctions.
Reuters has seen documents detailing discussions about a credit facility that Russia would grant to Vietnam to buy heavy weaponry, including anti-ship missiles, anti-submarine aircraft and helicopters, anti-aircraft missile systems and fighter jets.
One of these, a letter sent by Vietnamese Prime Minister Pham Minh Chinh to the Russian government in May, expressed interest in the possible new deal.
A Vietnamese military officer confirmed the authenticity of the letter and discussions about a new $8 billion credit facility to purchase heavy weapons.
A spokesperson for Vietnam’s Foreign Ministry did not respond to multiple requests for comment on the documents, which show Moscow’s push for months for a loan deal that would sidestep Western sanctions on Moscow.
Hanoi is in similar discussions with several arms suppliers, including the United States. In recent weeks, Vietnam has participated in several high-level defense meetings with top Russian officials.
The US-Vietnam upgrade will include a security dimension, Jon Finer, the US’s top deputy national security adviser, told reporters on Sunday as he sat with Biden on a plane to Vietnam from a Group of 20 summit in India.
He said he had no arms deals to announce at this stage, but emphasized that the US and its partners could offer Vietnam help to diversify away from Russian military supplies, an offer he said Vietnam was receptive to.
That would help Vietnam reduce military dependence on Moscow, “a relationship that we think they are increasingly uncomfortable with,” Finer said.
CHIPS, RARE EARTHS
Biden’s visit comes as bilateral trade and investment ties grow and a long-simmering territorial dispute between Vietnam and China flares up in the South China Sea.
Vietnam Airlines is expected to sign an initial agreement to buy about 50 Boeing (BA.N) 737 Max planes in a deal worth $10 billion timed to the trip.
Highlighting Vietnam’s growing importance as a ‘friendshoring’ destination for US tech companies, executives from Google, Intel, Amkor, Marvell, GlobalFoundries and Boeing are expected to meet with Vietnamese technology executives and Secretary of State Antony Blinken in Hanoi on Monday .
Still, semiconductors are the centerpiece of an action plan adopted during Biden’s visit, U.S. officials said.
Besides possible announcements by U.S. companies, it’s unclear what else the partnership could mean. Under the CHIPS Act, the US government has made available $100 million per year for five years to support semiconductor supply chains worldwide. Much of it could go to Vietnam, officials said.
More support for training skilled workers is also part of the deal, as Vietnam faces a major shortage of engineers in the chip sector.
Another key issue is strengthening supply chains of crucial minerals, especially rare earths, of which Vietnam has the world’s second largest reserves after China, US officials said.
Two people familiar with the plans said an agreement on rare earths was expected during Biden’s visit, which ends Monday when he flies back to America.
However, details are scarce. Previous attempts by U.S. companies to partner with Vietnamese rare earth companies have not been successful, according to a person involved in a recent plan.
Human rights remain a controversial issue, with US officials regularly criticizing Hanoi for jailing activists and restricting freedom of expression. Vietnam may show goodwill, with diplomats suggesting activists could be released.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is published from a syndicated feed.)
