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    • Yellen visits Vietnam, seeking to build U.S. ties and supply chains, and offset tensions with China

    U.S. Treasury Secretary Janet Yellen speaks while visiting a factory assembling electric scooters in Hanoi, Vietnam on Thursday, July 20, 2023. (Hau Dinh/AP Photo) U.S. Treasury Secretary Janet Yellen speaks while visiting a factory assembling electric scooters in Hanoi, Vietnam on Thursday, July 20, 2023. (Hau Dinh/AP Photo)
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    The U.S. considers building strong economic and security ties with Vietnam a priority, U.S. Treasury Secretary Janet Yellen said Thursday as she met with Vietnamese officials in a visit aimed at fortifying America's relations across Asia.

    Yellen arrived in Vietnam after visits to Beijing and to India, where she attended financial meetings of the Group of 20 major industrial economies.

    "The United States considers Vietnam a key partner in advancing a free and open Indo-Pacific," Yellen told Vietnamese Prime Minister Pham Minh Chinh, according to remarks provided by the U.S. Treasury Department.

    A "free and open Indo-Pacific" refers to the latest iteration of broad U.S. diplomacy aimed at cultivating stronger ties with other countries in the region to counter China's growing sway among its neighbors.

    "Vietnam is also a close economic partner, with our two-way trade reaching record highs last year and the United States serving as Vietnam's largest export market," Yellen said. "It is a priority for our administration to deepen our economic and security ties with Vietnam in the months and years to come."

    Yellen briefly sat atop a bright red electric scooter during a visit to a factory in Hanoi's lush green suburbs, where Selex Motors, a five-year-old Vietnamese startup, makes EV scooters and batteries.

    Climate change poses an existential threat to the world but also provides a "key economic opportunity" and way to build "greater resilience into our economies," she said, describing the facility as "impressive."

    Yellen said the U.S. recognized the importance of diversifying supply chains after experiencing the disruptions brought by the COVID-19 pandemic. "And then, when Russia invaded Ukraine, many countries saw what the implications could be of being overly dependent -- in Europe's case for natural gas and oil -- on a country that could use it for geopolitical ends," she said.

    She said the U.S. was actively trying to promote green resilience in supply chains. That doesn't mean ending trading relationships with China, she said, reiterating comments she has voiced before. "But we do partner with more countries. And we see Vietnam as an excellent partner," she said.

    Yellen said the U.S. is committed to mobilizing $15 billion to support Vietnam's adoption of renewable energy as a part of the Just Energy Transition Partnership or JETP -- a financial promise made by the Group of Seven advanced economies to help the country phase out its reliance on fossil fuels. Such projects have offered similar incentives to South Africa and Indonesia.

    Speaking earlier to a group of business women and economists, Yellen said she was encouraged by growing investments in Vietnam in industries including computer chips and renewable energy.

    Yellen's visit is part of concerted U.S. efforts to balance China's growing influence in the Indo-Pacific. Earlier this year, Secretary of State Antony Blinken visited Vietnam weeks after the 50th anniversary of the U.S. troop withdrawal that marked the end of America's direct military involvement in Vietnam. He pledged to boost relations to new levels.

    Diplomatic relations between the two countries were only restored in 1995. Since then, bilateral trade has grown, reaching a high of $138 billion in goods trade last year.

    "We have worked closely to address the legacies of the war," Yellen said.

    China's border is less than 60 miles (96 kilometers) from Hanoi and Vietnam, like many of China's neighbors, has had maritime and territorial disputes with Beijing in the South China Sea. The two sides fought a brief war in 1979. But China is Vietnam's biggest trading partner.

    Yellen also met Thursday with the governor of Vietnam's central bank, Nguyen Thi Hong, and announced a new economic policy dialogue between the State Bank of Vietnam and the U.S. Treasury Department.

    She thanked Nguyen for the "close cooperation" between the U.S. and the State Bank of Vietnam to address American concerns over Vietnam's currency practices. She added that the U.S. would remain supportive of Vietnam's growth and that this would be beneficial for both Vietnamese and American people.

    Vietnam has quickly become a major export production hub for global manufacturers like South Korea's LG and Samsung Electronics, suppliers to Apple, Inc. and auto makers like Honda and Toyota.

    Associated Press video journalist Hau Dinh contributed from Hanoi, Vietnam.

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