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Many US tech firms make their goods in Vietnam

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Hanoi willing to adapt supply chains, but gradually,

source says

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Third round of US-Vietnam talks ended last week, more

needed

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Vietnam's leader Lam plans US trip, no date set yet

By Francesco Guarascio

HANOI, June 16 (Reuters) - The United States is pushing

Vietnam in tariff talks to reduce the use of Chinese tech in

devices that are assembled in the country before being exported

to America, three people briefed on the matter said.

Vietnam is home to large manufacturing operations of tech

firms such as Apple ( AAPL ) and Samsung, which

often rely on components made in China. Meta and Google

also have contractors in Vietnam that produce goods

such as virtual reality headsets and smartphones.

The Southeast Asian nation has been organising meetings with

local businesses to boost the supply of Vietnamese parts, with

firms showing willingness to cooperate but also warning they

would need time and technology to do so, according to one person

with knowledge of the discussions.

The Trump administration has threatened Vietnam with

crippling tariffs of 46% which could significantly limit access

for Vietnam-made goods to their main market and upend the

Communist-run country's export-oriented growth model.

Vietnam has been asked "to reduce its dependency on Chinese

high-tech," said one person familiar with the discussions. "That

is part of the restructuring of supply chains and would in turn

reduce U.S. dependency on Chinese components," the person added.

The ultimate objective is to speed up U.S. decoupling from

Chinese high-tech while increasing Vietnam's industrial

capacity, a second person said, citing virtual reality devices

as an example of Vietnam-assembled products that are too

dependent on Chinese technology.

All sources declined to be identified as the discussions

were confidential. Reuters was not able to learn if the U.S. has

proposed numerical targets such as caps on Chinese content for

"Made in Vietnam" goods or different tariff rates based on the

amount of Chinese content.

Apple ( AAPL ), Samsung, Meta and Google did not reply to Reuters

requests for comment.

As the U.S.-imposed deadline of July 8 nears before the

tariffs take effect, the timing and scope of a possible deal

remain unclear.

All sources stressed that while the U.S. has made broader

requests for Vietnam to reduce its reliance on China, tackling

the issue of Chinese high-tech content in exports was a key

priority.

Last year, China exported around $44 billion of tech such as

electronics components, computers and phones to Vietnam, about

30% of its total exports to the country. Vietnam shipped $33

billion of tech goods to the United States or 28% of the

U.S.-bound exports. Both flows are on the rise this year,

according to Vietnam's customs data.

Vietnam's trade ministry did not reply to Reuters requests

for comment. Separate sources have previously said that U.S.

demands were seen as "tough" and "difficult" by Vietnamese

negotiators.

The U.S. also wants Vietnam to crack down on the practice of

shipping Chinese goods to America with misleading "Made in

Vietnam" labels that draw lower duties - which Vietnam is also

trying to heed.

The ministry said on Sunday that a third round of talks last

week in Washington ended with progress, but critical issues

remain unresolved.

Vietnam's ruling Communist Party chief To Lam intends to

meet U.S. President Donald Trump in the United States, possibly

in late June, officials with knowledge of the matter said. No

date has been announced for the trip.

The White House and Vietnam's foreign ministry did not

respond to requests for comment on the possible visit.

NOT TOO FAST

Local firms attending meetings organised by the trade

ministry in recent weeks expressed a general willingness to

adapt, but many warned that instant changes "would destroy

business", according to one of the sources.

Vietnam has been slowly developing an industrial ecosystem

with local suppliers but it has a long way to go before it can

match China's advanced supply chains and cheaper pricing,

industry executives say.

"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.

Abrupt changes to existing practices may hurt Vietnam's

delicate relationship with China, which is both a major investor

in its Southeast Asian neighbour and a source of security

concerns.