Vietnam, a critical hub for tech manufacturing, finds itself at the center of a trade dispute instigated by the United States. The US is pressing Vietnam to diminish its reliance on Chinese components in the production of electronics destined for the American market, including popular devices like iPhones, Android phones, and VR headsets. A critical deadline of July 8 looms, after which Vietnamese exports could face tariffs as high as 46% if the requested changes are not implemented. The underlying message from Washington is clear: reduce the use of Chinese technology or risk losing access to a primary export destination.
The Biden administration is actively urging Vietnam to reshape its supply chains, targeting a decrease in the use of Chinese technology within products assembled in Vietnam but sold in the US. Apple and Samsung heavily utilize Vietnamese assembly facilities, with additional manufacturing occurring for Meta and Google. A significant proportion of the components, however, continue to originate from China. In 2024, China supplied approximately $44 billion in electronics and phone parts to Vietnam, accounting for 30% of its total exports to the country. Meanwhile, Vietnam’s tech product exports to the US reached $33 billion, and both figures are projected to rise in 2025, prompting increased scrutiny from the US.
The Vietnamese trade ministry has already initiated discussions with domestic businesses, which have expressed a willingness to adjust suppliers but have cautioned that such shifts cannot be implemented overnight. Experts suggest that Vietnam is rapidly closing the gap in supply chain sophistication, though it still lags behind China. This situation presents a diplomatic tightrope for Vietnam, as swiftly removing Chinese components could destabilize its relationship with Beijing, a key investor and geopolitical ally. Vietnamese negotiators reportedly view the US demands as challenging, and the US is also urging Hanoi to address the mislabeling of goods to prevent the circumvention of tariffs by Chinese tech. Negotiations are continuing, with a potential meeting between US and Vietnamese leaders planned to resolve outstanding issues before the impending July 8 deadline, which poses a significant risk to Vietnam’s tech export prospects in the US market.