Biden’s One-Day Visit To Vietnam: New Avenues In Bilateral Relations For Indo-Pacific – Analysis


The relationship between the United States and Vietnam is not characterized as a formal military alliance. However, it does establish the United States as a prominent participant in Vietnam’s official relations, placing it on equal diplomatic footing with Russia and China.

With new goals for the Ino-Pacific, President Biden undertook a brief state visit to Vietnam. The United States seeks to enhance bilateral collaboration between itself and Vietnam in several domains, including trade, technology, education, climate change, and regional security. The United States aims to enhance the diplomatic ties between the two countries, perhaps elevating the existing relationship to either a strategic partnership or a comprehensive strategic partnership. Furthermore, President Biden aims the rising influence and aggression of China.

During a recent diplomatic engagement, President Biden unveiled a collaborative initiative known as the US-Vietnam Semiconductor Partnership, while engaging in discussions with Prime Minister Pham Minh Chinh of Vietnam. President Biden and Prime Minister Chinh expressed their approval of the $7.8 billion agreement between Vietnam Airlines and Boeing, which included the procurement of 50 737 Max passenger aircraft. The primary objective of Biden’s visit extended beyond the realm of geopolitics. Vietnam and the United States want to enhance cooperation in pivotal and developing technological domains.

The United States is now exploring Vietnam as a potential substitute for semiconductors, which are crucial not only in many commercial sectors but also for military hardware. The CHIPS Act of the US allocates a substantial amount of US$280 billion in financing to support the domestic semiconductor manufacturing sector in the United States. Additionally, it designates a separate amount of US$500 million, to be distributed over five years, for the establishment of an International Technology Security and Innovation Fund (ITSI Fund). Vietnam has successfully accessed the aforementioned money via the establishment of a Memorandum of Cooperation focused on the development of semiconductor supply chains, workforce, and ecosystem. This collaboration aims to use the ITSI money to enhance Vietnam’s existing semiconductor ecosystem.

A potential conflict with China has the potential to significantly disrupt the global supply of semiconductors. This disruption would not only affect China’s semiconductor production but also impact Taiwan, which now holds the position of the world’s biggest producer of semiconductors. In an additional noteworthy strategic economic domain, the comprehensive security alliance entails the augmentation of Vietnam’s rare earth production, which holds crucial importance for many commercial and military purposes. China now has a dominant position in global manufacturing. Vietnam has the second-largest reserves of rare earth elements globally, behind China.

Within this particular environment, the visit made by Biden was widely seen as a favorable occasion to promote and push for a higher level of foreign investment, as well as to stimulate significant interest in Vietnam’s semiconductor sector. It was evident that Vietnam regarded this matter as a primary concern. Nevertheless, when seen through the lens of the United States, assisting in semiconductor production in Vietnam contradicts its objectives. The Biden administration is seen by some as engaging in actions that might potentially escalate tensions with China on the issue of Taiwan. These actions include a purposeful weakening of the One China policy. Although not openly acknowledged, it is evident that the United States is actively pursuing the enhancement of military relations with Vietnam, a country that has ongoing territorial conflicts with China in the South China Sea.

In the year 2022, China remained Vietnam’s primary trade partner, while the United States held the position of Vietnam’s second-biggest trading partner. Conversely, Vietnam ranked as the ninth largest trading partner of the United States during the same year. The joint statement issued by President Biden and General Secretary Trong acknowledged Vietnam’s formal request for a comprehensive evaluation of its market economy designation. Despite the United States’ efforts to strengthen its connections, Vietnam continues to preserve its links with China as a result of its reliance on investment. The government has also attempted to establish an arms agreement with Russia, that has been resisted by the United States. Vietnam has shown prudence in avoiding the risk of estranging China. However, its strong affiliation with the United States serves as an indirect indication to China that Vietnam has other economic avenues.

Vietnam has a significant reliance on Russia since almost 80 percent of its arms, indicating a longstanding and well-established relationship. Hanoi has refrained from issuing explicit condemnation of the Russian invasion of Ukraine and persists in procuring weaponry from Russia, even the potential exposure to sanctions imposed by the United States. In the pursuit of enhancing bilateral relations with Vietnam, President Biden has shown a degree of leniency towards the nation’s procurement of Russian weaponry. Furthermore, the joint statement issued by President Biden and General Secretary Trong primarily emphasized the need to achieve a comprehensive, equitable, and enduring resolution to the conflict in Ukraine.

From an economic lens, the U.S. International Development Finance Corporation (DFC) intends to implement a series of substantial financing initiatives, valued at more than US$450 million, in collaboration with several Vietnamese banks. These initiatives will provide financial resources to enterprises in Vietnam. In addition, USAID will provide a total of US$11.41 million over two years to enhance the climate resilience of economies in the Mekong Delta that heavily rely on agriculture.

The Vietnamese government extended a kind reception to President Biden during his visit, and both parties reached a significant milestone by mutually agreeing to upgrade their bilateral ties. Vietnam has reiterated its commitment to collaborating with the United States and other relevant stakeholders to preserve peace within the Indo-Pacific region. Both nations have reiterated the significance of fostering economic, trade, and investment collaboration, as well as promoting innovation-led inclusive economic expansion.

The recent visit has effectively established a heightened presence and influence of the United States in the Indo-Pacific, while concurrently fostering a more equitable and stable relationship with China and mitigating the risk of a renewed Cold War or a zero-sum game. The enhancement of Vietnam’s economic growth and innovation, together with its integration into the global supply chains and digital economy, would be facilitated by this initiative. In general, the reception of Biden’s visit to Vietnam was characterized by a constructive, courteous, and future-oriented approach.

In conclusion, Vietnam has been seen as a significant strategic ally for the United States, despite its diplomatic ties with Russia and China. Vietnam demonstrated its commitment to enhancing its relations with the United States and assuming a positive role within the region.

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