Missed Opportunity: Critical Minerals and the U.S.-Vietnam Comprehensive Strategic Partnership

Introduction

In September 2023, President Joe Biden traveled to Hanoi and met the late General Secretary Nguyen Phu Trong, marking the 10th anniversary of the U.S.-Vietnam comprehensive partnership. The two leaders surprised observers by skipping the intermediate “strategic partnership” tier altogether and elevating relations directly to a Comprehensive Strategic Partnership, the top rung of Hanoi’s diplomatic hierarchy.

At the center of the announcement was a new semiconductor partnership, under which Washington pledged $2 million in seed funding to help build resilient chip supply chains and expand Vietnamese manufacturing capacity. The joint readout also highlighted a further $1.6 billion investment by U.S. firm Amkor Technology to build a factory in Bac Ninh province and two design centers in Ho Chi Minh City.

Since then, progress has stalled. Working with Vietnamese authorities to more precisely measure the country’s mineral deposits, the U.S. Geological Survey (USGS) revised its estimates of Vietnam’s rare earth elements, previously estimated at roughly 22 million metric tons in 2024—then the world’s second largest—to 3.5 million metric tons in its 2025 report. In October 2025, the two countries reached a framework trade agreement reducing U.S. tariffs on Vietnamese goods from 46 to 20 percent, but the deal included no provisions on critical minerals, and Hanoi has stressed it remains only a framework.

Despite this pattern, follow-through on the 2023 U.S.-Vietnam critical minerals commitments has been minimal. General Secretary To Lam met Silicon Valley leaders during a 2024 visit to the UN General Assembly, but little concrete progress has followed, and it remains unclear how Vietnam fits into the Trump administration’s broader Indo-Pacific strategy. Hanoi, shaken by the administration’s unilateral imposition of tariffs, has favored pragmatic engagement over confrontation, continuing to seek cooperation wherever possible. For example, Vietnam opted to join President Trump’s signature Board of Peace, and To Lam attended the initiative’s inaugural meeting in Washington in February.

The Strategic Significance of Critical Minerals

Critical minerals underpin advanced manufacturing—including laptops, solar panels, electric vehicles (EVs), and fighter jets—making them a fiercely contested strategic asset. China holds roughly 70 percent of global rare earth mining capacity and 90 percent of refining capacity, giving Beijing significant leverage over global supply chains.

Beijing has repeatedly used this leverage as political pressure, restricting exports of gallium and germanium in 2023 in response to U.S. chip export controls and curbing exports of seven rare earths in 2025 after President Trump’s “Liberation Day” tariffs. These moves have pushed affected countries toward stockpiling and diversification. In February 2026, the United States hosted a Critical Minerals Ministerial with 54 countries—though notably not Vietnam—building on the “Pax Silica” framework and the 14-member Minerals Security Partnership.

Global demand for critical minerals is projected to grow nearly sixfold by 2040 as the clean energy transition accelerates. The United States has responded with legislation such as the Inflation Reduction Act and CHIPS and Science Act and has folded critical minerals provisions into recent trade agreements with Malaysia, Thailand, Indonesia, Pakistan, Saudi Arabia, and Ukraine—several granting the United States first right of refusal on raw ore exports.

U.S.-Vietnam Alignment on Critical Minerals

Three factors have historically driven U.S.-Vietnam strategic alignment. First, China’s repeated incursions into Vietnamese waters between 2014 and 2019 pushed Vietnam toward deeper security cooperation with the United States, building trust that spilled over into other domains. Second, both countries share an interest in de-risking supply chains from China, motivating Vietnamese investment in semiconductors, EVs, and solar manufacturing, underpinning the 2023 semiconductor MOU. Third, deepening trade ties make Washington indispensable to Hanoi’s goal of reaching upper-middle-income status by 2030 and advanced economy status by 2045. The United States purchases nearly 30 percent of Vietnam’s exports, and the Communist Party’s developmental ambitions rest heavily on industries dependent on critical minerals. Hanoi has invested considerable resources in expanding assembly, testing, and packaging capabilities in semiconductors.

The 2023 U.S. investment pledges were a meaningful first step, but the United States could do considerably more, for instance, utilizing the legislative powers of the CHIPS Act and financing from the Development Finance Corporation and Export-Import Bank of the United States to help Vietnam build downstream rare earth separation and refining infrastructure. Bringing Hanoi into minilateral frameworks such as the Minerals Security Partnership and Pax Silica would further embed Vietnam in a coalition capable of counterbalancing Chinese dominance.

Vietnam's Strengths and Weaknesses as a Critical Minerals Supplier

Vietnam retains real strategic assets: a favorable location and labor costs that make it attractive for “China+1” investment, relative political stability, and a growing semiconductor sector. But its position in rare earths has weakened considerably. The 2025 USGS revision dropped Vietnam from second after China to sixth in global rare earth reserve rankings—behind Brazil, India, Australia, and Russia—based on updated government data reclassifying proven reserves. Vietnam’s remaining strengths lie elsewhere: It holds roughly 18 percent of global reserves of bauxite, the raw ore from which aluminum is extracted, and it is the world’s second-largest producer of tungsten, a mineral central to defense manufacturing. It also has meaningful deposits of lanthanum and neodymium used in EV magnets.

Vietnam’s 2023 plan targeted processing over 2 million tons of rare earths annually by 2030, yet actual extraction reached only 600 tons in 2023 and 300 tons in 2024. Corruption prosecutions—including the 2023 arrests of executives at Thai Duong Group and Vietnam Rare Earth JSC and the 2025 sentencing of a former deputy minister to three years in prison—have frozen operations and chilled foreign investment, notably at the promising Dong Pao mine. In response, Vietnam has updated its legal framework, passing a new Law on Geology and Minerals in 2024 and a 2025 law restricting exports of rare earth ores and refined products to encourage in-country processing rather than shipping to China.

Expanding extraction also raises environmental and labor concerns. Past bauxite mining in Vietnam’s Central Highlands drew sustained pushback from civil society due to environmental concerns, the government’s lack of transparency, and the Chinese mining company’s use of laborers from China rather than Vietnam. The case of Indonesia offers a cautionary tale. In 2014, Jakarta passed legislation restricting the export of raw nickel ore, requiring international firms to develop domestic refining capabilities within Indonesia. While the move was widely heralded as a success for Jakarta, it has done little to benefit Indonesia’s own labor force while deepening the country’s dependence on Chinese technology to export nickel. Furthermore, it has exacerbated environmental destruction and social tensions between local communities and mining companies.

U.S.-Vietnam Relations Going Forward

Four trends complicate deeper cooperation:

1. U.S. tariffs and scrutiny of transshipment have unsettled bilateral trade relations. The October 2025 framework agreement kept 20 percent tariffs in place, though these were later reduced to 10 percent following a Supreme Court ruling in February 2026 and subsequently readjusted to 12.5 percent after Section 301 investigations into unfair trade practices. The framework agreement also saw Vietnamese purchases of Boeing aircraft and investment pledges but left critical minerals and transshipment unaddressed.
2. Smaller states such as Vietnam face mounting pressure to align with one great power or another in the U.S.-China technology competition, even as the Trump administration’s more transactional, less values-driven foreign policy reduces some of Vietnam’s traditional anxieties about U.S.-driven regime pressure.
3. Vietnam-China ties have warmed substantially: Consider Xi Jinping’s 2023 and 2025 visits to Hanoi, as well as To Lam’s trip to Beijing in 2024—his first overseas visit after becoming general secretary. The two countries have signed dozens of new economic agreements and deliberately compartmentalized maritime disputes in the South China Sea in favor of broader strategic stability.
4. Fourth, the relative calm in U.S.-China relations under the second Trump administration—reflected in a 2025 National Security Strategy and 2026 National Defense Strategy that both downplay great power competition and omit Vietnam entirely—has diminished Southeast Asia’s strategic salience in the United States’ eyes.

Periodic senior-level contacts, including two phone calls between Trump and To Lam and a visit by a Vietnamese delegation to Washington in February 2026, which resulted in $37.2 billion in agreements, have failed to inject the necessary momentum to jumpstart the bilateral partnership. Nor has this engagement translated into any tangible progress on critical minerals or waved away reliance on Chinese refining capabilities. With no further high-level meetings scheduled, deeper cooperation in this domain appears unlikely in the near term.

Conclusion

The 2023 Comprehensive Strategic Partnership marked a high point in U.S.-Vietnam relations, built on shared concerns about Chinese assertiveness in the South China Sea, supply chain security, and the political will of leaders on both sides. Yet the semiconductor and critical minerals cooperation at its core has seen little follow-through, as tariff disputes and wider uncertainty regarding the U.S. commitment to Asia have consumed the bandwidth of policymakers in both capitals.

Looking ahead, warming Sino-Vietnamese ties and the United States’ reduced emphasis on great power rivalry suggest that the case for U.S.-Vietnam critical minerals cooperation will rest on economic and commercial logic rather than strategic competition. Even where interests converge, overcoming China’s commanding lead in refining capacity remains a formidable challenge. Whether the Comprehensive Strategic Partnership fulfills its early promise will depend on whether Washington and Hanoi can move past current frictions and convert shared strategic interests into concrete, resilient cooperation.

Hunter Marston is an adjunct fellow (non-resident) in the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C. and the director of the Southeast Asia Program at the Lowy Institute in Sydney.