Biden Elevates Diplomatic Status with Vietnam, Secures Key Deals in Semiconductors and Minerals

This partnership with Vietnam aligns with the Biden administration's commitment to demonstrate its presence in the Indo-Pacific region and reinforce its status as a Pacific nation.

U.S. President Joe Biden secured significant agreements with Vietnam on semiconductors and minerals during his visit on Sunday.

This visit marked a historic milestone as Vietnam elevated its diplomatic status for the United States, placing it alongside China and Russia in terms of importance.

The United States has been actively pursuing this upgrade for several months, recognizing Vietnam’s crucial role in diversifying global supply chains, thereby reducing dependence on China-related risks.

In Hanoi, Biden was welcomed with a ceremony organized by the ruling Communist Party, featuring schoolchildren waving American flags and honor guards with bayoneted rifles.

In his speech, President Biden acknowledged the remarkable progress in the relationship between the two nations over the past five decades, moving from conflict to normalization to their current elevated status.

This partnership with Vietnam aligns with the Biden administration’s commitment to demonstrate its presence in the Indo-Pacific region and reinforce its status as a Pacific nation.

Vietnam is navigating its relations between Washington and Beijing carefully, aiming to establish itself as a low-cost manufacturing hub amid the global competition.

Top Chinese officials, potentially including President Xi Jinping, are expected to visit Vietnam soon as Hanoi seeks to maintain positive relations with major world powers.

During his visit, President Biden also revealed discussions with President Xi’s deputy at the G20, focusing on stability in the region.

Vietnam’s long-standing relationship with Russia is undergoing scrutiny due to the conflict in Ukraine.

Talks have been underway for a new arms supply deal, including heavy weaponry such as anti-ship missiles, anti-submarine aircraft, helicopters, anti-aircraft missile systems, and fighter jets. Vietnam is considering an $8 billion credit facility for this purpose.

The U.S.-Vietnam partnership will include a security dimension, aiming to help Vietnam diversify its military supplies away from Russia.

This move aligns with Vietnam’s increasing discomfort with its reliance on Moscow.

Biden’s visit coincides with growing trade and investment ties between the two nations and a territorial dispute between Vietnam and China in the South China Sea.

Vietnam Airlines is expected to sign a substantial agreement to purchase Boeing 737 Max jets during the visit.

Vietnam’s growing importance as a destination for U.S. technology companies is evident as executives from Google, Intel, Amkor, Marvell, GlobalFoundries, and Boeing are expected to meet with Vietnamese counterparts and Secretary of State Antony Blinken.

Semiconductors are a central focus of the partnership, with plans to support semiconductor supply chains globally, potentially allocating a significant portion of the $100 million a year for five years under the CHIPS Act to Vietnam.

Additionally, efforts to train skilled workers in the semiconductor sector will receive support.

The partnership also aims to strengthen critical mineral supply chains, particularly rare earths, in which Vietnam possesses some of the world’s largest deposits after China.

Despite these economic and strategic agreements, human rights remain a contentious issue, with U.S. officials regularly raising concerns about activist detentions and limited freedom of expression in Vietnam.

Diplomatic discussions have hinted at the possibility of releasing activists as a goodwill gesture in the future.

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