US Treasury’s Yellen sees Vietnam as key partner in ‘friendshoring’ supply chains

By Andrea Shalal

(Reuters) – The United States sees Vietnam as a key partner in expanding green energy sources and building more resilient supply chains, U.S. Treasury Secretary Janet Yellen said in a speech to be delivered in the country’s capital of Hanoi on Friday.

Yellen, continuing her travels in Asia, told the U.S.-ASEAN Business Council that trade between the two countries had been growing at nearly 25% a year for the past two decades, and reached a record high last year.

“There is no sign that this momentum is slowing,” Yellen said in a text of her prepared remarks released late on Thursday in Washington, noting that investment in Vietnam’s semiconductor sector was also accelerating.

Yellen’s visit is part of a push by the United States to upgrade its formal ties with Vietnam as it works to reduce dependence on Chinese supply chains by expanding manufacturing at home and boosting trade with trusted partners. But its efforts have met some resistance in Hanoi, over what experts see as concerns that China could view the move as hostile.

The United States and Vietnam normalized relations in 1995, two decades after the end of the Vietnam War, and signed a bilateral trade agreement five years later.

Yellen noted that Vietnam had become a critical node in the global semiconductor supply chain, and cited big investments made by U.S. companies in Vietnam, including Arizona-based Amkor (NASDAQ:) and Intel (NASDAQ:), which has its largest assembly and testing facility in the world in Saigon.

Yellen’s speech did not mention China, which she visited earlier this month. She underscored that Washington’s “friendshoring” drive was not meant for “an exclusive club of countries. It is open and inclusive of advanced economies, emerging markets and developing countries alike.”

She said Washington was looking to strengthen ties with emerging markets and developing countries, including through the Group of Seven’s pledge to mobilize $600 billion in infrastructure investments, which experts see as a deliberate counterweight to China’s Belt and Road Initiative.

The United States is also working to help countries address the worsening climate crisis, Yellen said, citing U.S. support for Vietnam’s Just Energy Transition Partnership that is working to mobilize $15 billion in public and private funds to help Vietnam transition to a net-zero emissions economy by 2050

“Now, it is vital to intensify our cooperation to build momentum for these efforts in Vietnam, evaluate project opportunities with the multilateral development banks, and deliver a Resource Mobilization Plan that provides a roadmap for implementation,” she said.

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