Semiconductors, rare minerals on agenda as US president Joe Biden visits Vietnam

The United States and Vietnam plan to raise their relations as US President Joe Biden visits the nation from Sunday, with officers saying the main target of the talks will likely be semiconductors and significant minerals.

The US has been pushing for the improve for months because it sees the Southeast Asian manufacturing dynamo as a key nation in its technique to safe international provide chains from China-related dangers.

The overhaul could also be shadowed, nevertheless, by a New York Times report on Saturday that Vietnam was in talks with Russia over a brand new arms provide deal that would set off US sanctions.

The report cites a March Vietnamese finance ministry doc laying out plans for Hanoi to pay to modernise its forces via a Vietnamese-Russian oil enterprise in Siberia.

Reuters has seen, however not been capable of authenticate, paperwork describing talks for a credit score facility that Russia would lengthen to Vietnam to purchase heavy weaponry, together with anti-ship missiles, antisubmarine plane and helicopters, antiaircraft missile methods and fighter jets.

A spokesperson for Vietnam’s overseas ministry has not responded to a number of requests for touch upon the paperwork, which present Moscow pushing for months for a mortgage deal that might bypass Western sanctions on Moscow, and Vietnam displaying “interest”.

Hanoi is in related talks with a number of arms suppliers together with the US It is unclear how far these talks have advanced. In current weeks, Vietnam has engaged in a number of high-level defence conferences with high Russian officers.

Chips, uncommon earths

A half-century after a prolonged and brutal conflict, the US is anticipated to raise Vietnam to the identical diplomatic tier as China and Russia, Biden and different US officers mentioned. Vietnamese officers have proven optimism in regards to the anticipated improve, regardless of preliminary issues over how big neighbour China would react.

After a Group of 20 summit in India, Biden is to reach at Vietnam’s Presidential Palace on Sunday afternoon for a proper welcome from Communist Party General Secretary Nguyen Phu Trong, Vietnam’s strongest chief, then go to celebration headquarters, the place the 2 will meet and provides public remarks.

The go to comes as bilateral commerce and funding ties are rising and a long-simmering territorial dispute between Vietnam and China heats up within the South China Sea.

Highlighting Vietnam’s rising significance as a “friendshoring” vacation spot for US know-how corporations, executives from Google, Intel, Amkor, Marvell, GlobalFoundries and Boeing are anticipated to satisfy on Monday with Vietnamese tech executives and Secretary of State Antony Blinken in Hanoi.

Semiconductors are the centrepiece of an motion plan to be adopted throughout Biden’s go to, including concrete deliverables to the diplomatic improve, a US official mentioned. Many see the improve as far as symbolic as a result of the Washington already successfully has shut ties with Hanoi.

Besides potential bulletins by US companies, it’s unclear how important the US administration’s contribution to the sector may very well be, having solely $100 million a 12 months for 5 years accessible below the CHIPS Act to help semiconductor provide chains globally. A big a part of it may go to Vietnam, officers mentioned.

More help to coach expert employees can also be anticipated, as Vietnam faces a significant scarcity of engineers within the chips sector.

Another key difficulty is strengthening provide chains of important minerals, particularly uncommon earths, of which Vietnam has the world’s largest deposits after China, in accordance with US estimates, officers mentioned.

Two folks aware of the plans mentioned an settlement on uncommon earths was anticipated throughout Biden’s go to, which ends on Monday when he flies again to America.

Details, nevertheless are scant. Past makes an attempt by US corporations to companion with Vietnamese uncommon earth companies haven’t succeeded, in accordance with an individual concerned in a single current plan.

Trade can also be mentioned, as Vietnam’s commerce surplus with the US trails solely these of China and Mexico.

Human rights stay a controversial difficulty, with US officers often criticising Hanoi for jailing activists and limiting freedom of expression. Vietnam could present goodwill, with diplomats suggesting activists may very well be freed.