REUTERS/Kevin Lamarqueīiden traveling to Vietnam following G-20 summit next monthĪfter the pandemic broke out, corporations were increasingly forced to consider strategies known as “China plus one,” which meant spreading out production hubs as a way to reduce reliance on a sole manufacturing base. President Joe Biden and first lady Jill Biden arrive at Kahului Airport, Kahului, Hawaii, U.S., August 21, 2023. During the US-China trade war, which started in 2018, businesses of all sizes began moving manufacturing to emerging markets such as Vietnam and India over tariffs. Those tensions add to a litany of pressures, including rising labor costs and an uncertain operating environment that have already made corporations think twice about how much business they do in China, which is still considered the factory of the world.īut increasingly, it has competition. “Rather than being highly reliant on countries where we have geopolitical tensions and can’t count on ongoing, reliable supplies, we need to really diversify our group of suppliers,” she said in a speech last year at the Atlantic Council think tank. The practice refers to the movement of supply chains toward allies in part to shield businesses from political friction. The two sides have been moving closer as US officials, particularly Treasury Secretary Janet Yellen, have repeatedly pointed to the importance of “friend-shoring.” Last year, Vietnam became America’s eighth largest trading partner, rising from 10th place two years earlier. The United States imported nearly $127.5 billion in goods from Vietnam in 2022, compared with $101.9 billion in 2021 and $79.6 billion in 2020, according to US government data. In recent years, their trade has already soared under an existing partnership agreed in 2013, so the elevation in relations is “just catching up with the reality that already exists,” Ted Osius, president of the US-ASEAN Business Council and a former US ambassador to Vietnam, told CNN. President Biden, right, and US Secretary of State Antony Blinken, left, meeting with Vietnam's General Secretary Nguyen Phu Trong at the Communist Party of Vietnam Headquarters, in Hanoi on Sunday Evan Vucci/AP He met with Vietnamese General Secretary Nguyen Phu Trong and other leaders to “promote the growth of a technology-focused” Vietnamese economy, as well as discuss ways to improve stability in the region, according to the White House. “Southeast Asia is one of the world’s fastest growing aviation markets, and the 737 MAX is the perfect airplane for Vietnam Airlines to efficiently meet that regional demand,” Brad McMullen, Boeing senior vice president of commercial sales and marketing, said in a statement.īiden’s visit, which followed the G20 summit in India, was the first by a US president to Vietnam since Donald Trump’s 2019 trip. Boeing said that the carrier will buy 50 of its 737 Max jets. On Monday, the White House announced a “ landmark deal” between Boeing and Vietnam Airlines worth $7.8 billion, which is expected to support more than 30,000 jobs in the United States. The former foes formally upgraded diplomatic ties to a “comprehensive strategic partnership,” a symbolic yet highly important move that experts say will solidify trust between the nations as America seeks an ally in Asia to counteract political tensions with China and advance its ambitions for key technologies, such as chipmaking.Ĭompanies from Apple ( AAPL) to Intel ( INTC) have already pushed deeper into the country to diversify their supply chains, maxing out many Vietnamese factories and helping fuel an economic expansion that continues to defy a global slowdown. President Joe Biden left Vietnam Monday after a visit that deepened economic ties between Washington and Hanoi as part of efforts to reduce America’s reliance on China.
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