U.S. Tells Vietnam to 'Cut Back on Chinese Parts'... Speeds Up Supply Chain Restructuring

Pressuring Vietnam with High Tariffs

"More Stringent Crackdown on Chinese Circumvention of Exports Needed"

The United States is pressuring the Vietnamese government to reduce reliance on Chinese technologies for products assembled in Vietnam and exported to the U.S. Observers note that the U.S. is aggressively restructuring the global supply chain using high tariffs as leverage.

According to Reuters, citing sources on the 17th, the U.S. has demanded a reduction in the use of Chinese components and technology during its tariff negotiations with Vietnam. While Vietnam has become a major production hub for global IT companies like Apple and Samsung Electronics, it still depends considerably on China for sourcing parts, making this a key issue in the negotiations.

Last year, China exported about $44 billion worth of tech products—including electronic components, computers, and mobile phones—to Vietnam. This represented roughly 30% of China’s total exports to Vietnam. One source stated, "The U.S. wants Vietnam to lower its dependence on advanced Chinese technologies," adding, "This is part of the U.S.'s strategy to restructure the supply chain and reduce reliance on Chinese parts."

The Trump administration has warned that tariffs as high as 46% may be imposed on Vietnamese products. The imposition of such tariffs would inevitably hit Vietnam hard, as the U.S. is its largest export market. With the July 8 tariff deadline approaching, no final agreement has yet been reached between the two countries. To Lam, the General Secretary of the Communist Party of Vietnam, is reportedly scheduled to visit the U.S. later this month for talks with President Trump.

The Vietnamese government is also in discussions with companies to expand local procurement of components but has acknowledged that securing and switching technologies will require time. Carlo Ciandone, a supply chain expert based in Vietnam, assessed that "Vietnam lags 15–20 years behind China in terms of supply chain scale and sophistication." He also warned, "While local companies understand the need for change, rapid shifts could be detrimental to their survival."

The U.S. is calling for a stronger crackdown on cases where Chinese products are exported with 'Made in Vietnam' labels as a form of circumvention. The U.S. plans to block Chinese goods with lower tariffs from entering the market through such tactics. Vietnam has also indicated willingness to cooperate on certain requests, such as cracking down on false labeling.

However, Vietnam cannot ignore its diplomatic ties with China. China is not only one of Vietnam's largest investors but also maintains ongoing security tensions with the country, making the relationship complex. This creates a diplomatic dilemma for Vietnam, caught between the U.S. and China.

Reporter: Heyin Lee hey@hankyung.com