Vietnam Emerges as Key Player in US Economic Diversification Strategy

• 12 September 2023
• Construction Focus
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President Joe Biden’s visit to Vietnam marks a pivotal moment in the strengthening of economic bonds between the United States and Hanoi. This strategic move aims to reduce America’s dependence on China and signifies a significant diplomatic shift, according to CNN News on 11 September 2023.

The two former adversaries have formally upgraded their diplomatic relations to a “comprehensive strategic partnership.” This symbolic yet profoundly important step is seen as a cornerstone in building trust and cooperation between the nations. The United States seeks a robust Asian ally to navigate political tensions with China and to advance its ambitions, particularly in vital technologies like chip manufacturing.

Global corporations such as Apple (AAPL) and Intel (INTC) have already expanded their presence in Vietnam, diversifying their supply chains. Many Vietnamese factories are operating at maximum capacity, contributing to the nation’s impressive economic growth despite global economic headwinds.

President Biden’s visit, which comes on the heels of the G20 summit in India, marks the first visit by a US president to Vietnam since Donald Trump’s trip in 2019. During his stay, President Biden has held discussions with Vietnamese General Secretary Nguyen Phu Trong and other leaders. Their talks have centred on fostering a technology-driven Vietnamese economy and addressing regional stability concerns, as outlined by the White House.

In recent years, bilateral trade between the United States and Vietnam has witnessed substantial growth, building on an existing partnership established in 2013. As Ted Osius, President of the US-ASEAN Business Council and former US ambassador to Vietnam, notes, this elevation in relations reflects the current reality of their thriving economic ties.

US government data reveals that American imports from Vietnam amounted to nearly US$127.5 billion in 2022, up from US$101.9 billion in 2021 and US$79.6 billion in 2020. This surge in trade has propelled Vietnam to become America’s eighth-largest trading partner in 2022, a significant rise from its tenth-place ranking just two years earlier.

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