The United States is reportedly pushing Vietnam in tariff talks to reduce the use of Chinese technology in devices made in the country and exported to America. The Trump administration has threatened the Southeast Asian nation with a whopping 46% tariff rate, which can significantly affect the presence of Vietnam-made goods in their main market, and upend Vietnam’s import-export model.
Vietnam has been asked “to reduce its dependency on Chinese high tech,” a source told Reuters. “That is part of the restructuring of supply chains and would in turn reduce U.S. dependence on Chinese components,” the person added.
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Tech firms with manufacturing operations in Vietnam include Apple, and Samsung, which often rely on components made in China. Meta and Google also have contractors in Vietnam that produce goods such as virtual reality headsets and smartphones.
This move aims to speed up U.S. decoupling from Chinese advanced tech while increasing Vietnam’s industrial capacity. Virtual reality divides have been cited as an example of Vietnam-assembled products that are too dependent on Chinese technology. While the U.S. has made broader requests to reduce reliance on China, its priority has been to tackle Chinese advanced technology in exports.
Last year, China exported around $44 billion worth of technology such as electronics components, computers and phones to Vietnam. This comes to around 30% of the total exports to the country. Vietnam shipped $33 billion worth of tech goods to the United States or 28% of the U.S.-bound exports. According to Vietnam’s customs data, both flows are on the rise this year. Separate sources have stated Vietnam found these demands “tough,” and “difficult.”
The U.S. also wants Vietnam to crack down on the practice of shipping Chinese goods to America with misleading “Made in Vietnam” labels that draw lower duties. Vietnam is attempting to heed to this instruction.
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According to Vietnam’s trade ministry, a third round of talks held last week in Washington made progress, though key issues remain unresolved. Vietnam’s Communist Party Chief To Lam is expected to visit the United States and meet with President Donald Trump, possibly in late June, according to officials familiar with the matter. No official date has been announced and the White House and Vietnam’s foreign ministry are yet to comment on the potential visit.
While Vietnamese firms attending recent trade ministry meetings expressed a willingness to adapt, they also claim that sudden changes can be detrimental to business. Industry experts claim that while Vietnam is gradually building an industrial base with local suppliers, it still lags far behind China in terms of supply chain sophistication and cost effectiveness.
Abrupt changes in policy can also strain Vietnam’s relationship with China, which remains a key investor and a source of both economic cooperation and geopolitical tension.