U.S. industrial companies General Electric Co. and Caterpillar Inc. made deals with Vietnam worth billions of dollars as Vietnamese Prime Minister Nguyen Xuan Phuc continued his three-day trip to the United States.
Phuc’s trip included a meeting with President Donald Trump Wednesday afternoon at the White House as well as the signing of deals with U.S. companies for high-tech goods and services worth $15 billion to $17 billion when GE and Caterpillar are included.
President Trump, who talked trade with Prime Minister Phuc during the visit on Wednesday, welcomed the signing of the business deals and the jobs they would create.
“They (Vietnam) just made a very large order in the United States – and we appreciate that – for many billions of dollars, which means jobs for the United States and great, great equipment for Vietnam,” Trump told reporters at the White House.
Phuc’s meeting with Trump makes him the first Southeast Asian leader to visit the White House under the new administration.
The U.S. wants “Vietnam to bring some ideas about how to tackle the surplus on an ongoing basis,” said Murray Hiebert, a Southeast Asia expert at the Center for Strategic and International Studies, referring to the multibillion-dollar trade surplus that Vietnam runs annually with the United States.
“I heard from U.S. officials ahead of the trip that just signing deals with U.S. companies was nice but not enough.”
General Electric said on Wednesday it had signed deals in Vietnam worth about $5.58 billion for power generation, aircraft engines and services, its largest single combined sale with the country in GE’s history.
GE’s agreement with Vietjet Aviation includes 20 jet engines made by CFM International, a joint venture of GE and Safran SA of France. It also includes a 12-year engine service contract for 215 LEAP-1B engines on 100 Boeing 737 MAX aircraft that Vietjet has ordered, GE said.
GE’s power unit signed a memorandum of understanding to build two 750-megawatt gas fired turbine power plants in conjunction with state energy group PetroVietnam, using the Blue Whale Gas Field. PetroVietnam signed an agreement with the Vietnamese unit of Exxon Mobil Corp. in January to develop the field, Vietnam’s largest gas project.
GE also signed a joint development agreement to erect an 800-megawatt wind power facility. Partners in the agreement are Phu Cuong Group and International Mainstream Renewable Power, GE said.
Caterpillar and its dealer in Vietnam, Phu Thai Cat, agreed to provide generator management technology for more than 100 generators in Vietnam, the company said. The technology would allow for remote function monitoring including fuel, temperature and pressure. The value of the Caterpillar deal was not disclosed.
GE’s shares ended regular trading on Wednesday up 2 cents at $27.38 on the New York Stock Exchange. Caterpillar shares finished down 4 cents at $105.43, also on the NYSE.
While Vietnam and U.S. have stepped up security cooperation in recent years, trade has become a potential irritant, with a deficit widening steadily in Vietnam’s favor, reaching $32 billion last year, compared with $7 billion a decade earlier.
Commerce Secretary Wilbur Ross said it was important to shrink the U.S. trade deficit with Vietnam but noted that the southeast Asian country of 80 million people was the fastest-growing market for U.S. exports, rising 77 percent since 2014 to $4.4 billion.
“The growth of the middle class and the increasing purchasing power in Vietnam are further incentives to strengthening our long-term trade and investment relationship,” Ross said.
Trump, who has had strong words for countries with large trade surpluses with the United States, said he would be discussing trade with Phuc, as well as North Korea.
U.S. has been seeking support to pressure North Korea to drop its nuclear and missile programs, which have become an increasing threat to the United States. Hanoi has said it shares concerns about North Korea.
In his Heritage speech, Phuc welcomed Trump’s plans to attend the November APEC summit in Hanoi. He called it a sign of U.S. commitment to the region and “an important occasion for the United States to assert its positive role.”
In a reference to somewhat warmer ties between U.S. and China under Trump, who has been courting China’s support on North Korea, Phuc said Vietnam welcomed good relations between the two powers, but hoped these would serve the interest of other nations in the region too.
He urged U.S. and China “to act with full transparency and in a responsible manner so as not to impact negatively the region and relations among other nations.”
On Tuesday, U.S. Trade Representative Robert Lighthizer expressed concern about the rapid growth of the deficit with Vietnam. He said it was a new challenge for the two countries and he was looking to Phuc to help address it.
The deficit is Washington’s sixth largest and reflects growing imports of Vietnamese semiconductors and other electronics products in addition to more traditional sectors such as footwear, apparel and furniture.
Phuc said the two economies were “more complementary than competitive” and said U.S. exports to Vietnam had seen a rapid rise.
On Tuesday his trade minister, Tran Tuan Anh, presented Lighthizer with suggestions to address some U.S. concerns, such as advertising on U.S. social media, electronic payment services and imports of information security and farm products, Vietnam’s trade ministry said.
Vietnam also urged the United States to remove an inspection program for catfish, speed import licenses for its fruit and make fair decisions on anti-dumping and anti-subsidy measures on Vietnamese products, the ministry said.
Vietnam was disappointed when Trump ditched the 12-nation Trans-Pacific Partnership (TPP) trade pact, of which Hanoi was expected to be one of the main beneficiaries, and focused U.S. trade policy on reducing deficits.