US President Joe Biden on Sunday secured the possibility of major deals with Vietnam on semiconductors and rare minerals, as the strategically important Southeast Asian country elevated its relationship with the United States to a higher diplomatic status, alongside those with China and Russia, Reuters reported. . , reports News.ro

Washington has been pushing for this improved relationship for months because it sees Vietnam as a key country in its strategy to protect global supply chains from China-related risks.

Half a century after the long and brutal Cold War conflict, Joe Biden arrived in Hanoi for a ceremony organized by the ruling Communist Party, including schoolchildren waving American flags and an honor guard holding bayonet rifles. Communist Party General Secretary Nguyen Phu Chong, 79, greeted the 80-year-old US president at his party’s headquarters, saying: “You haven’t aged a day and I would say you look even better than before.”

Biden wanted to note the steps that have been taken in the direction of improving bilateral relations. “We can trace a 50-year arc of progress between our nations, from conflict to normalization to this new elevated status” of relations, he said.

Partnership with Vietnam, but with an eye on China

The partnership with Vietnam is part of the Biden administration’s efforts to “demonstrate to Indo-Pacific partners and the world that the United States is a Pacific nation and it is not going anywhere,” Biden told reporters after the meeting in Hanoi.

Vietnam is experiencing frozen relations between Washington and Beijing as the technology and textile exporter seeks its own footing in international competition to become a center for low-cost manufacturing.

Senior Chinese officials, including 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 Chinese Premier Li Qiang at the G20 summit and that they talked about “stability.”

Talking about Russian weapons

Vietnam’s long-term relations with Russia are being tested by the war in Ukraine. Hanoi’s talks with Moscow on a new arms deal could trigger US sanctions.

Reuters has seen documents describing discussions about a credit line that Russia will provide to Vietnam to buy heavy weapons, including anti-ship missiles, anti-submarine planes and helicopters, anti-aircraft missile systems and fighter jets. One of those documents, a letter sent in May by Vietnamese Prime Minister Pham Minh Chin to the Russian government, shows interest in a possible new deal. A Vietnamese military officer confirmed the authenticity of the letter and negotiations for a new $8 billion line of credit to purchase heavy weapons.

A spokesman for Vietnam’s foreign ministry did not respond to multiple requests for comment on the documents, which show Moscow has been pushing for months for a loan deal that would bypass Western sanctions against Moscow.

Hanoi is in similar talks with several arms suppliers, including the United States. But in recent weeks, Vietnam has held several high-level meetings with Russian officials.

Improving relations between the US and Vietnam will include a security dimension, John Feiner, US deputy national security adviser, confirmed on Sunday. The statement was made on board the plane that was taking Biden from the G20 summit in India to Vietnam.

The adviser said he did not have any arms deal at this stage, but noted that the US and partners could offer Vietnam help diversifying its supplies against Russian supplies, an offer Vietnam would accept, Feiner said. That would help Vietnam reduce its military dependence on Moscow, “a relationship that we think they are increasingly uncomfortable with,” Feiner said.

Semiconductors, rare materials and trade deals

Biden’s visit to Vietnam comes at a time when bilateral trade and investment ties are growing and a long-standing territorial dispute between Vietnam and China is re-igniting in the South China Sea.

As such, Vietnam Airlines is expected to sign an initial agreement to purchase 50 Boeing 737 Max aircraft in a deal worth $10 billion.

Underscoring Vietnam’s growing importance as a “friend support” location for US tech companies, executives from Google, Intel, Amkor, Marvell, GlobalFoundries and Boeing will also meet with Vietnamese technology leaders and Secretary of State Anthony Blinken in Hanoi on Monday.

However, during Biden’s visit, semiconductors are a central part of the adopted action plan, US officials said.

Beyond possible statements from American corporations, it is unclear what else this top-level partnership between Washington and Hanoi could mean.

The US government, however, has $100 million a year available over five years under the CHIPS Act to support global semiconductor supply chains. A significant part of this amount may end up in Vietnam, officials say.

Greater support for the training of skilled workers is also part of the deal, as Vietnam faces a severe shortage of engineers in the chip sector.

Another key issue is strengthening supply chains for essential minerals, especially rare earths, as Vietnam has the largest deposits in the world after China, according to US estimates.

Two people familiar with the plans told Reuters they expected a deal on rare earth metals during Biden’s visit, which ends on Monday when he returns to America. However, there are few details. Previous attempts by American companies to partner with Vietnamese rare-earth firms have been unsuccessful, according to a person involved in a recent project.

Human rights remain a contentious issue in bilateral relations, with US officials regularly criticizing Hanoi for jailing activists and restricting free speech. Vietnam may show goodwill, and diplomats suggest some activists may be released.