IndoPacific

May 7 (UPI) — As Washington and Hanoi enter a dense stretch of trade diplomacy, the coming weeks will test whether one of the Indo-Pacific’s most pragmatic economic partnerships can sustain its momentum or become entangled in the very frictions it has worked to avoid.

A series of meetings — including Section 301 hearings on industrial capacity from Tuesday to Friday this week, forced labor discussions April 28 to May 1 and bilateral consultations next Monday and Tuesday, arrives at a pivotal juncture.

They will help determine whether the United States and Vietnam can preserve a trade relationship that has become central to supply chain resilience, U.S. business interests and Vietnam’s continued economic ascent.

At its core, the U.S.-Vietnam Comprehensive Strategic Partnership is grounded not in diplomacy alone, but also in economic logic.

Partnership built on complementarity

Over the past decade, Vietnam has emerged as one of the fastest-growing U.S. trading partners, driven by a convergence of structural interests. As American firms diversify production beyond China, Vietnam has become a preferred destination, offering cost competitiveness, political stability and deepening integration into global value chains.

U.S. data show Vietnam ran a $123.5 billion trade surplus with the United States last year — the fourth-largest imbalance after China, the European Union and Mexico. It is a figure that has drawn increasing scrutiny in Washington even as it reflects the depth of bilateral trade integration.

From electronics to apparel and consumer goods, Vietnam-based production is often embedded within supply chains designed and financed by U.S. and allied firms. American companies benefit from lower production costs and diversified risk, while Vietnamese exports sustain growth and employment at home.

Disrupting this ecosystem through blunt trade measures risks undermining the very businesses Washington seeks to protect.

Hanoi has consistently signaled a willingness to engage. It has approached trade tensions not with confrontation, but with negotiation — a posture that stands in contrast to more adversarial economic relationships. The upcoming consultations should reinforce that cooperative trajectory, not derail it.

Rethinking “overcapacity”

The debate over “overcapacity” has become a central issue in U.S. trade discussions, with concerns that the term is being applied broadly across different economic models.

In Vietnam’s case, officials and industry observers note that production growth is largely driven by market-based investment and global supply chain shifts rather than state-directed industrial surpluses.

“Vietnam’s overcapacity is much different from China’s,” said Murray Hiebert, head of research for Bower Group Asia. “China’s factories are producing huge surpluses that it dumps onto the world’s markets below market prices. Instead, Vietnam relies on foreign investment companies to produce for export.”

He noted that Vietnam’s export engine is overwhelmingly foreign-driven, with multinational firms, particularly from the United States and South Korea, accounting for roughly 80% of outbound shipments, while domestic producers contribute only about one-fifth.

“Vietnam’s economy is largely a manufacturing platform for foreign companies,” Hiebert said. “U.S. policymakers need to understand Vietnam did not create overcapacity by subsidizing manufacturing, but by courting foreign investors who used Vietnam as a low-cost base to serve global markets.”

Vietnam’s manufacturing expansion has been shaped by global supply chain realignment, accelerated by U.S.-China trade tensions and pandemic-era disruptions, rather than by state-led efforts to flood international markets. Many of the factories operating in Vietnam were relocated or expanded by multinational firms seeking to maintain access to U.S. consumers.

To conflate this model with subsidy-driven overproduction risks misdiagnosing the issue and penalizing a partner that has facilitated, rather than distorted, market outcomes.

Labor reforms and supply chain progress

Concerns over labor practices and supply chain integrity remain part of the policy conversation, particularly in the context of ongoing forced labor discussions. But these concerns should be weighed against Vietnam’s steady, if incremental, progress.

In recent years, Hanoi has undertaken significant labor reforms aligned with the International Labor Organization, including updates to its labor code, expanded worker representation rights and enhanced compliance mechanisms.

Vietnam has also prioritized traceability and transparency across key export sectors. From fisheries to manufacturing, authorities have invested in monitoring systems, strengthened inspections and improved regulatory oversight — steps aimed at meeting the expectations of international partners and markets.

This is an evolving process, not a completed one. But the trajectory is clear: Vietnam is moving toward higher standards, not retreating from them.

The case for market economy recognition

Another unresolved issue, Vietnam’s designation as a non-market economy under U.S. trade law, has become increasingly difficult to justify.

Vietnam operates within the framework of the World Trade Organization and has been recognized as a market economy by more than 70 countries. Its private sector has expanded rapidly, its regulatory environment continues to evolve and its integration into global markets is deepening.

Maintaining Vietnam’s current non-market economy designation under U.S. trade law has raised concerns among policymakers and business groups, who say it could affect the application of trade remedies and investor confidence. The issue comes as Washington seeks to expand economic partnerships across the Indo-Pacific.

Avoiding unintended consequences

Intellectual property has emerged as a new point of tension in U.S.-Vietnam trade relations. Ambassador Jamieson Greer, the U.S. trade representative, has designated Vietnam as a “Priority Foreign Country” — its most serious classification — in its latest intellectual property rights report, opening the door to a potential Section 301 investigation within 30 days.

The designation, the first of its kind in more than a decade, reflects ongoing U.S. concerns over Vietnam’s intellectual property protections and could affect the trajectory of current trade negotiations.

Sweeping trade measures designed to address structural concerns could disrupt supply chains, raise costs for American businesses and consumers, and weaken a partnership that has delivered measurable benefits. In an already fragile global economy, such outcomes would be counterproductive.

Vietnam’s own incentives align with stability. Its growth depends on open markets, foreign investment and compliance with international standards. That alignment should be viewed as a strategic asset.

Washington should avoid applying a China-centric lens to Vietnam’s trade profile, said Dan Harris, a partner at the law firm Harris Sliwoski. Treating Vietnam as an “overcapacity” case without clear evidence risks penalizing U.S. firms that relocated production there in line with Washington’s own push to reduce reliance on China and strengthen supply chain resilience.

“We will end up punishing the companies that did what we asked,” Harris warned.

He added that the broader strategic context matters: Vietnam’s long history of conflict and mistrust with China sets it apart from Beijing, even as it emerges as an increasingly important U.S. partner in the Indo-Pacific.

But the implications of Washington’s trade posture toward Hanoi extend far beyond economics. Vietnam’s export-driven growth, fueled primarily by multinational investment rather than state subsidies, has quietly elevated the country into a strategic linchpin in the Indo-Pacific.

A stable and prosperous Vietnam not only supports supply chain diversification, but also reinforces the rules-based order in the South China Sea.

Economic resilience in Vietnam is not peripheral to U.S. strategy. It is foundational to maintaining balance in contested Indo-Pacific waters. Trade policy cannot be divorced from strategic reality: A weakened Vietnamese economy would do more than disrupt production flows. It could undercut one of the region’s most important counterweights to China’s expanding maritime presence.

Balancing trade and security alignments

Rising risks of policy missteps could carry strategic costs. Analysts warn that overly punitive U.S. trade measures, particularly those misreading Vietnam’s market-driven model, may push Hanoi toward alternative economic alignments, reshaping regional supply chains and weakening U.S. influence in an increasingly competitive Indo-Pacific.

U.S. policymakers are weighing more targeted, cooperative measures in managing trade concerns with Vietnam, including a bilateral supply chain monitoring mechanism, expanded data-sharing on industrial capacity and the potential creation of a standing U.S.-Vietnam trade and standards working group.

The approach aims to address regulatory and transparency issues while maintaining stability in the broader economic partnership.

The challenge for Washington is alignment – translating economic logic into strategic necessity. That means recognizing Vietnam not as a trade problem to be managed, but rather as a partner whose economic trajectory is increasingly central to the region’s stability and security.

Beyond trade flows and investment figures, the U.S.-Vietnam economic relationship carries broader strategic significance. It reinforces a rules-based framework in the Indo-Pacific and supports cooperation across sectors ranging from technology to maritime security.

Any escalation in trade tensions between the United States and Vietnam could disrupt commercial ties and place broader strategic cooperation at risk, as both sides seek to sustain recent gains in economic and security engagement.

James Borton is a non-resident senior fellow at Johns Hopkins SAIS Foreign Policy Institute and the author of Harvesting the Waves: How Blue Parks Shape Policy, Politics, and Peacebuilding in the South China Sea. Borton is the editor-in-chief of the South China Sea NewsWire. The views and opinions expressed in this commentary are solely those of the author.

April 29 (Asia Today) — China expressed opposition Wednesday to Japanese Prime Minister Sanae Takaichi’s “free and open Indo-Pacific” initiative, calling it an attempt to promote bloc confrontation.

Chinese Foreign Ministry spokesman Lin Jian made the remarks at a regular briefing in response to reports that Takaichi may present a revised Indo-Pacific strategy during a visit to Vietnam this weekend.

“Exchanges between countries should not target a third party or harm the interests of a third party,” Lin said. “Japan uses the slogan of being ‘free and open,’ but in reality it is stirring up confrontation between camps and creating a small, exclusive group.”

Lin said such actions run counter to the shared desire of regional countries and the international community for peace, development and cooperation.

“They will be difficult to win support,” he said.

According to Japan’s Foreign Ministry, Takaichi is scheduled to visit Hanoi on Friday and meet with To Lam, general secretary of the Communist Party of Vietnam, and Prime Minister Le Minh Hung.

Diplomatic sources in Beijing said the talks are expected to focus on strengthening the two countries’ comprehensive strategic partnership, including in economic security fields such as energy, critical minerals and science and technology.

Takaichi is also expected to deliver a speech outlining Japan’s foreign policy direction, including its Indo-Pacific strategy, around the time of the meetings.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260429010009593

April 23 (UPI) — As tensions simmer across the Taiwan Strait, Taiwan is quietly accelerating a shift toward drone-centric defense.

The nation is betting that swarms of low-cost, domestically produced systems can help offset the numerical and industrial advantages of China’s People’s Liberation Army Navy and its expanding network of maritime auxiliaries.

This approach reflects a broader recalibration in Taipei — a move away from expensive, vulnerable platforms toward distributed, resilient and scalable capabilities designed to complicate any attempt at invasion or blockade.

At its core lies a simple calculation. In a high-intensity Indo-Pacific conflict, quantity, adaptability and survivability may matter more than traditional firepower.

From platforms to swarms

Taiwan’s embrace of drones is rooted in the concept of asymmetric warfare. Rather than matching China ship-for-ship or missile-for-missile, Taipei is investing in systems that can be mass-produced, dispersed and rapidly replaced.

“It’s not really about ‘swarms’ yet — it’s about mass. Large volumes of drones used in salvos to overwhelm defenses and increase the probability of a successful strike,” said Molly Campbell, analyst at the Center for a New American Security in Washington, D.C.

Government plans call for the procurement of up to 200,000 drones over the coming decade, spanning aerial, maritime and hybrid platforms in what officials describe as a whole-of-society approach to resilience.

These include a broad mix of air (UAV), surface (USV) and underwater (UUV) drones, designed to operate in contested littoral environments.

The objective is clear: saturate defenses, disrupt amphibious operations and raise the cost of any Chinese military action.

“What Taiwan is trying to do is shift from heavy, high-end defense platforms to a more dispersed and resilient model,” Simona Alba Grano, a senior fellow at the Asia Society Policy Institute, told UPI.

In Taiwan’s case, where the goal is not to defeat China outright, but to make any invasion “extremely costly and uncertain,” such systems fit squarely within a broader denial strategy.

Lessons from Ukraine — with limits

Taiwan’s drone push has been influenced by Ukraine’s battlefield innovations, where low-cost unmanned systems have reshaped modern warfare.

Ukraine’s use of maritime drones in the Black Sea, striking high-value naval targets with relatively inexpensive systems, provides a compelling reference point. It has also highlighted the importance of rapid iteration, short development cycles and close integration between operators and industry.

Taiwanese companies have begun engaging with this ecosystem, supplying components and spare parts to Ukrainian operators and seeking to gain exposure to combat-driven innovation.

Yet, the analogy has limits.

The Taiwan Strait presents a far more demanding operational environment as it is wider, more exposed and subject to extreme weather conditions. Systems must operate over longer distances, carry heavier payloads and withstand harsher maritime conditions.

At the same time, Ukraine’s drone ecosystem is shaped by continuous battlefield validation, giving its manufacturers a level of operational credibility that remains difficult to replicate elsewhere.

Advances in unmanned systems, including long-range platforms and “mothership” concepts, also are eroding the Taiwan Strait’s traditional role as a natural buffer, increasing the tempo of gray-zone interactions.

Ukraine has demonstrated what is possible. Taiwan must now determine what is adaptable to its own operational environment.

Industrial ambition meets resistance

Taiwan’s challenge is no longer strategic clarity, but execution on the ground. The gap between planning and implementation, particularly in scaling capabilities and coordinating across agencies, now defines the island’s defense posture.

“Ukraine’s drone production is on a completely different scale. It’s nowhere near comparable to what Taiwan is currently able to produce, ” Campbell said.

Authorities have signaled openness to integrating foreign expertise, pursuing joint production and accelerating domestic manufacturing. Yet, progress has been uneven.

Industry insiders point to reluctance among local manufacturers to share market opportunities within a rapidly expanding defense budget. This has constrained collaboration both domestically and internationally, slowing efforts to build a more integrated ecosystem.

This dynamic is particularly visible in Taiwan’s interactions with Ukraine. Despite Kyiv’s operational experience and willingness to cooperate, Taiwanese firms have at times resisted incorporating Ukrainian know-how into their platforms, limiting co-development opportunities.

At the same time, Taiwanese companies have sought to market their own systems abroad, often with limited success in operationally mature environments. The result is a mismatch between industrial ambition and battlefield credibility in a highly competitive, experience-driven sector.

The fragmentation of Taiwan’s drone ecosystem comes at a critical moment, when speed, scale and integration are essential.

Cutting the China supply chain

Another pillar of Taiwan’s strategy is reducing reliance on Chinese components, long a structural vulnerability in the global drone industry.

“Taiwan is making a concerted effort to eliminate Chinese components from its drone supply chain to reduce dependence and mitigate security risks, said Ava Shen, an analyst at the Eurasia Group.

Taipei is working with international partners, particularly the United States, to develop a secure, China-free supply chain for unmanned systems. This effort is now backed by policy initiatives in Washington, where bipartisan legislation seeks to expand joint drone production and strengthen industrial resilience between the two partners.

The objective is not only to secure supply chains, but also to align production ecosystems in ways that enhance interoperability and long-term sustainability.

However, decoupling comes with trade-offs. Eliminating Chinese components increases production costs, extends timelines and complicates scaling. These constraints risk slowing deployment at a moment when speed is critical.

Meanwhile, China continues to expand its own unmanned capabilities, including drone swarms, electronic warfare systems and the conversion of legacy platforms into remotely operated assets. The scale of its industrial base and the integration of civilian and military sectors present a formidable challenge.

If Taiwan’s approach emphasizes agility and innovation, China’s rests on mass, coordination and systemic depth.

Southeast Asia as regional test bed

Beyond Taiwan, Southeast Asia, particularly along the South China Sea littoral, is emerging as a practical testing ground for unmanned systems.

The United States has expanded drone support to regional partners, providing intelligence, surveillance and reconnaissance platforms such as the ScanEagle, RQ-20 Puma and Skydio X10 UAVs to countries including the Philippines, Vietnam, Malaysia and Indonesia. These systems are primarily used to enhance maritime awareness in contested areas.

The Philippines, under sustained pressure from Beijing, has become a focal point. The United States has deployed MQ-9A Reaper for extended surveillance missions and introduced maritime drones, such as the Devil Ray T-38.

Together, these deployments are turning parts of Southeast Asia into a real-world environment for testing unmanned concepts short of conflict, particularly in maritime surveillance and denial.

China has also deployed uncrewed surface vehicles such as the Sea Wing and Wave Glider types, many of which have been lost or recovered by fishermen and coast guards, in the South China Sea as well as in the Java Sea, highlighting both the spread and the fragility of these systems in contested waters.

Deterrence, escalation and uncertainty

Drones offer Taiwan a pathway to strengthen deterrence by denial, increasing the cost, complexity and uncertainty of any military action. But they also introduce new risks.

The proliferation of low-cost systems may lower the threshold for escalation, especially in ambiguous encounters involving coast guard or maritime militia vessels. What begins as signaling or harassment could escalate more rapidly in an environment saturated with autonomous or semi-autonomous platforms.

Moreover, drone networks depend heavily on communications, data links and supply chains – all of which are vulnerable to disruption through cyber operations or electronic warfare.

Race against time

For Taiwan, the shift toward drone-centric defense is both an opportunity and a race against time.

Drones offer a scalable and cost-effective means of offsetting China’s advantages. But success depends on overcoming internal fragmentation, accelerating production and adapting technologies to local operational realities.

The central question is no longer whether drones will shape the balance in the Taiwan Strait, but whether Taiwan can scale and integrate them fast enough to make deterrence credible.

As China continues to refine its own capabilities, the balance in the Strait may increasingly hinge on a simple but decisive factor: which side can deploy, adapt and sustain unmanned systems at scale.