Vietnam Welcomes Starlink Amid U.S. Trade Tensions

Vietnam is set to approve new regulations allowing Starlink’s full ownership, signaling a strategic shift amid U.S. trade concerns.

Vietnam Opens Door for Starlink as U.S. Trade Tensions Loom

Vietnam is poised to introduce new regulations that would allow Elon Musk’s Starlink to operate within the country while maintaining full foreign ownership of a local subsidiary, according to a draft of the proposed framework. This development marks a significant policy shift and follows prolonged negotiations between Starlink’s parent company, SpaceX, and Vietnamese officials.

A Strategic Pivot Amid U.S. Trade Concerns

The decision to welcome Starlink is being interpreted as a strategic move by Vietnam to balance its trade relationship with the United States. According to a government official familiar with the matter, the new rules serve as “an olive branch” to SpaceX and, by extension, the U.S. administration, particularly as Vietnam remains cautious about potential tariff actions from U.S. President Donald Trump.

A source with direct knowledge of the discussions noted that the change demonstrates Vietnam’s ability to engage in transactional diplomacy, adapting to shifting geopolitical and economic dynamics. While officials have not publicly commented on the matter, the shift aligns with broader efforts to strengthen economic ties with Washington amid increasing scrutiny over trade imbalances.

A Green Light for Starlink’s Entry

Vietnam has long maintained stringent controls over its telecommunications sector, barring foreign companies from having full ownership of internet service providers. However, SpaceX had previously insisted that lifting these restrictions was a prerequisite for its market entry. With the proposed rule changes, Starlink will now be able to operate under a pilot program that grants foreign satellite internet providers full ownership rights, with final approval resting with Vietnam’s prime minister.

The resolution, spanning 12 pages, is expected to be ratified during an extraordinary parliamentary session on Wednesday. It aims to “remove obstacles in scientific, technological, and innovation activities,” underscoring Vietnam’s ambition to modernize its digital infrastructure and attract high-tech investments.

Economic Implications and U.S. Trade Relations

Vietnam’s decision to accommodate Starlink comes amid growing concerns over its trade surplus with the U.S., which reached a record $123.5 billion last year, making it the fourth-largest trade imbalance among U.S. partners. Given Trump’s renewed focus on reducing trade deficits, Vietnam has been exploring ways to alleviate tensions, including increasing imports of U.S. agricultural products.

By allowing Starlink to establish a foothold, Vietnam is not only fostering technological advancement but also creating economic leverage. A surge in Vietnamese subscriptions to Starlink could help offset trade imbalances by generating U.S.-based revenue, potentially mitigating the risk of punitive tariffs.

SpaceX’s Expanding Footprint in Vietnam

Even before securing regulatory approval, SpaceX had been increasing its presence in Vietnam, expanding its supplier network and eyeing significant investments. The Vietnamese government previously stated that SpaceX has expressed interest in committing up to $1.5 billion in investments within the country. This aligns with Vietnam’s broader strategy to position itself as a hub for high-tech industries, particularly as manufacturers seek alternatives to China amid ongoing U.S.-China trade frictions.

The timing of these developments is critical. Trump recently directed his administration to devise reciprocal tariffs against nations imposing levies on U.S. imports, with a deadline set for April 1. Countries with significant trade surpluses, such as Vietnam, are expected to face heightened scrutiny. The inclusion of Starlink in Vietnam’s telecommunications ecosystem could serve as a diplomatic and economic buffer, demonstrating a willingness to engage with U.S. businesses while advancing domestic technological capabilities.

The Future of Starlink in Vietnam

Should the draft regulations be adopted as expected, Starlink’s arrival in Vietnam could significantly enhance internet accessibility, particularly in remote and underserved areas. The expansion aligns with Vietnam’s push to bolster digital infrastructure, a key component of its long-term economic growth strategy.

For now, neither SpaceX nor Vietnam’s Ministry of Information and Communications has publicly commented on the proposed rules. However, industry experts suggest that the move could set a precedent for other foreign tech firms seeking entry into Vietnam’s tightly regulated markets.

A Calculated Gamble

Vietnam’s willingness to adjust its stance on foreign-owned satellite internet providers reflects a pragmatic approach to international trade and investment. By facilitating Starlink’s entry, the country not only enhances its technological landscape but also strengthens its diplomatic standing with Washington at a time of economic uncertainty. Whether this strategy will be enough to curb potential U.S. tariffs remains to be seen, but for now, it represents a calculated gamble in an increasingly complex geopolitical environment.

Source:  (Reuters)

(Disclaimer:  This article is based on publicly available information and current regulatory drafts, which are subject to change. Readers are encouraged to consult official sources for the latest updates on Vietnam’s telecommunications policies and U.S. trade relations.)

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