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Several U.S. tech companies, including Intel (NASDAQ:INTC) and Apple (NASDAQ:AAPL), can breathe a slight sigh of relief if the U.S. and Vietnam can come to a trade agreement.
The two nations are close to finalizing an agreement that would impose tariffs on Vietnamese exports based on the percentage of foreign components they contain. Goods with the highest levels of foreign content could face tariffs of 20% or more, while products made entirely in Vietnam would remain at the current 10% rate.
Vietnamese Prime Minister Pham Minh Chinh expressed optimism that a deal could be reached before July 9, when a 46% tariff is set to take effect on certain goods.
Intel has invested more than $1B into Intel Products Vietnam, which operates one of the largest assembly and test plants within the chipmaker’s network. The facility performs back-end manufacturing processes, including the assembly and testing of microchips that are used in PCs and other devices.
“The accumulated export value is over $96B (2010-2024) which is approximately 60% of Saigon High Tech Park’s annual export values in 2024,” according to the American Chamber of Commerce in Vietnam.
Apple has also created a sizable footprint in Vietnam. The company expects the Southeast Asian nation to account for 20% of its iPads and Apple Watches, and 65% of its AirPods by the end of 2025. Apple has also started assembling a small percentage of its MacBooks in Vietnam.
In May, Meta Platform’s (NASDAQ:META) vice president of Southeast Asia said the company recently expanded manufacturing of its Quest 3S in Vietnam, according to Vietnam Investment Review.
Google (NASDAQ:GOOG)(NASDAQ:GOOGL) also produces some of its Pixel devices in Vietnam. However, it has recently started planning to shift some of this production to India to avoid the potential 46% tariff.