Vietnam's Rare Earth Dilemma: Caught Between the U.S. and China
Vietnam holds the world's second-largest rare earth reserves. Caught between the U.S. and China, Hanoi faces a high-stakes balancing act.
[Vietnam's Rare Earth Dilemma: Caught Between the U.S. and China]
Vietnam sits on the world's second-largest rare earth reserves, yet it plays its hand cautiously. Despite signing cooperation deals with the U.S., Japan, and Australia, the country still mostly exports raw materials. Processing technology remains underdeveloped, and the domestic supply chain has yet to take shape.
▍ The Vitamins of Industry
Rare earths are the "vitamins of modern industry." Without them, EV motors don't spin, smartphone screens don't light up, and radar systems don't function. The catch: Vietnam's deposits are concentrated near the Chinese border, and China controls 85% of global rare earth processing capacity.
If Vietnam were to sell rare earths to Taiwan, Beijing would almost certainly object.
▍ The Pull of De-Sinicization
The U.S. and its allies are not sitting idle. They are courting Vietnam with promises of technology, capital, and market access as part of broader efforts to reduce dependence on China.
For Taiwan, a stable rare earth supply from Vietnam would be a game-changer.
But Vietnam has long excelled at balancing great-power diplomacy. Whether Hanoi can profit from both sides without provoking either remains an open question.
