Vietnam orders airlines to accelerate U.S. deals amid trade probes

Key facts

• Vietnam has ordered its major airlines to review and accelerate multibillion-dollar agreements with U.S. companies.
• The directive also calls for exploring new import deals with American firms.
• This action is intended to bolster Vietnam's negotiating stance in trade talks with the United States.
• The move follows three U.S. probes targeting Vietnam for alleged trade distortions, intellectual property violations, and forced labor.
• Vietnam Airlines and Vietjet Air are jointly purchasing 250 Boeing 737 MAX aircraft.
• Sun Phu Quoc Airways contracted to buy 40 Boeing 787-9 Dreamliner jets.
• Vietjet also has an engine contract with Pratt & Whitney for its Airbus aircraft.

Vietnam has instructed its major airlines to accelerate existing multibillion-dollar agreements with U.S. manufacturers Boeing and Pratt & Whitney, and to explore new import deals with American companies. This directive, issued by the Ministry of Construction following a request from the Ministry of Industry and Trade, aims to strengthen Vietnam's position in ongoing trade discussions with the United States.

The move comes as the U.S. has initiated three separate probes into Vietnam's trade practices, citing issues such as excess capacity, intellectual property violations, and the use of goods produced with forced labor. The Vietnamese government is keen to demonstrate its commitment to bilateral trade agreements.

Flag carrier Vietnam Airlines and budget airline Vietjet Air have a joint deal for 250 Boeing 737 MAX aircraft. Additionally, Sun Phu Quoc Airways, part of the Sun Group conglomerate, has contracted for 40 Boeing 787-9 Dreamliner jets. Vietjet also holds a contract with Pratt & Whitney for engines for its Airbus fleet.

Vietnam's exports to the U.S. have significantly increased, contributing to a trade deficit that reached $54.8 billion in the first three months of the year, making it the second-largest deficit after Taiwan and surpassing those with China and Mexico. The U.S. administration has expressed a desire to reduce such trade imbalances.