US urges Vietnam to reduce Chinese tech use in exports to avoid high tariffs

Reuters reported that Vietnam has become a major manufacturing hub for technology giants such as Apple and Samsung, whose production lines still rely heavily on components made in China. Meta and Google also have contractors based in Vietnam manufacturing items like virtual reality headsets and smartphones.

In response, Vietnamese authorities have begun holding talks with local businesses to encourage greater use of domestically made parts. Companies have shown a willingness to comply but warn that they will need time and technological support to transition, one source familiar with the discussions said.

The Trump administration previously threatened Vietnam with punitive tariffs of up to 46%, a move that could severely restrict access for Vietnamese-made goods to their largest export market and jeopardise the country’s export-driven growth model.

One person involved in the discussions noted that Washington had asked Vietnam “to reduce its dependency on Chinese high-tech,” as part of a broader effort to restructure global supply chains and, by extension, reduce US reliance on Chinese components.

The ultimate aim is to accelerate Washington’s decoupling from Chinese high-tech industries while boosting Vietnam’s own industrial capacity. Virtual reality devices were cited as an example of goods currently assembled in Vietnam that remain overly dependent on Chinese technology, a second source said.

All sources emphasised that while the US has issued wide-ranging calls for Vietnam to lessen its reliance on China, reducing the Chinese high-tech content in exports is seen as a top priority.

In 2024, China exported roughly US$44 billion worth of technology products to Vietnam, including electronic components, computers, and mobile phones—around 30% of its total exports to the country.

In the same year, Vietnam shipped US$33 billion worth of tech products to the US, accounting for 28% of its total exports to the American market. Both figures are rising, according to Vietnamese customs data.

The US has also urged Hanoi to crack down on the trans-shipment of Chinese goods to the US under false “Made in Vietnam” labels to benefit from lower import duties—a practice Vietnam is reportedly trying to address.

While Vietnam has made strides in building its own industrial base with domestic suppliers, industry insiders say it still lags behind China’s advanced supply chains and cost efficiencies.

"Vietnam is about 15–20 years behind China in somewhat fully replicating its supply chain scale and sophistication, but it's catching up fast, especially in key sectors like textiles and electronics," said Carlo Chiandone, a Vietnam-based supply chain expert.

However, sudden shifts in established manufacturing practices could strain Vietnam’s delicate relationship with China, which remains both a key investor and a geopolitical concern for the Southeast Asian nation.