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(Photo: U.S. Export-Import Bank)
The U.S. has signed a $500 million deal to promote green exports to Vietnam, the source of the country's third-largest trade deficit and a quickly rising manufacturing alternative to China.
According to a statement released by the U.S. Embassy in Hanoi on 18, exports related to renewable energy, the climate, and infrastructure, companies can receive loans and other backing from the U.S. Export-Import (Exim) Bank.
The lender said in the statement that it would work with the Vietnam Development Bank to identify projects that will "help spur the green transition in Vietnam."
Vietnam's emergence as a pivotal link in global supply chains for electronics and apparel is accompanied by challenges in its port and power infrastructure. Efforts to transition to clean energy face financial hurdles, including potential jeopardy to foreign aid amidst crackdowns on anti-coal activists by the government.
Manufacturing contributes to increased shipments from Vietnam to the U.S., a trend highlighted by a Financial Times analysis showing a surge in Chinese exporters using the Southeast Asian nation as a transit point amid the Beijing-Washington trade tensions.
Over the past five years, U.S. imports from Vietnam have nearly doubled, according to data from the U.S. Bureau of Economic Analysis. It also shows that Vietnam has the third-highest surplus of countries trading with the U.S., behind only China and Mexico.
In January, Jose Fernandez, the U.S. Undersecretary of State for Economic Growth, Energy, and the Environment, visited Hanoi to advocate for investments in chips and metals crucial for electric cars, solar panels, and wind turbines. He emphasized the opportunity to expand trade both ways, saying "We're looking to sell more to Vietnam. We're also looking to buy more."
Exim Bank states its mission as assuming "credit and country risks that the private sector is unable or unwilling to accept" through providing loans, loan guarantees, working capital guarantees, and export credit insurance.
