US President Biden’s Vietnam visit to focus on upgrading ties, supply of chips and key minerals, honouring John McCain

The US has been pushing for the upgrade for months as it sees the Southeast Asian manufacturing dynamo as a key country in its strategy to secure global supply chains from China-related risks.

The overhaul may be shadowed, however, by a report on Saturday that Vietnam was in talks with Russia over a new arms supply deal that could trigger US sanctions.

Vietnam is reportedly laying out plans to pay to modernise its forces through a Vietnamese-Russian oil venture in Siberia. It is said to be in talks for a credit facility that Russia would extend to Hanoi to buy heavy weaponry, including anti-ship missiles, anti-submarine aircraft and helicopters, anti-aircraft missile systems and fighter jets, according to several government documents.

A spokesperson for Vietnam’s foreign ministry did not respond to multiple requests for comment on the documents, which show Moscow pushing for months for a loan deal that would bypass Western sanctions on Moscow, and Vietnam showing “interest”.

As Vietnam looks to upgrade US ties, is the move more symbolism than substance?

Hanoi is in similar talks with multiple arms suppliers including the US. In recent weeks, Vietnam has engaged in several high-level defence meetings with top Russian officials.

The upgrade will include a security dimension, Jon Finer, the US principal deputy national security adviser, said on Sunday, while on the plane with Biden to Vietnam from a G20 summit in India.

He said he had no arms deals to announce at this stage but stressed that the US and its partners could offer Vietnam help to diversify away from Russian military supplies, an offer which he said Vietnam was receptive to.

That would help Vietnam reduce military reliance on Moscow, “a relationship we think they are increasingly uncomfortable with,” Finer said.

Biden is to arrive at Vietnam’s Presidential Palace on Sunday afternoon for a formal welcome from Communist Party General Secretary Nguyen Phu Trong, Vietnam’s most powerful leader, then go to party headquarters, where the two will meet and give public remarks.

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His visit comes as bilateral trade and investment ties are growing and a long-simmering territorial dispute between Vietnam and China heats up in the South China Sea.

Semiconductors are the centrepiece of an action plan to be adopted during Biden’s visit, adding concrete deliverables to the diplomatic upgrade, a US official said. Many see the upgrade so far as symbolic because the Washington already effectively has close ties with Hanoi.

Another key issue is strengthening supply chains of critical minerals, especially rare earths, of which Vietnam has the world’s largest deposits after China, according to US estimates, officials said.

Two people familiar with the plans said an agreement on rare earths was expected during Biden’s visit, which ends on Monday when he flies back to America.

Biden will also use his visit to Hanoi to boost his image as a unifier by saluting the memory of John McCain – Vietnam war hero, Republican stalwart, and serial antagonist of Donald Trump.

With the 2024 election rapidly approaching, Biden is keeping one eye on the campaign even while abroad.

The 80-year-old, gunning for a second term, will on Monday visit the memorial to McCain marking where his plane was shot down on October 26, 1967.

Seriously wounded, fighter pilot McCain was taken prisoner of war, incarcerated for more than five years and tortured.

After the war he became involved in politics for the Republican Party, serving as a US senator for several decades and running for president in 2008, when he was defeated by Barack Obama – and his running mate Biden.

McCain also earned great respect from people in Vietnam for his work in building bridges between the former foes.