Vietnam and America: foes on paper, friends out of necessity

Donald Trump has accused Vietnam of treating America ‘even worse’ than China does on trade, and has imposed heavy duties on its steel imports
But tough rhetoric from Washington often belies the deepening convergence of their strategic interests as Beijing shakes up the region’s established order

Xuan Loc Doan

Published: 7:00pm, 23 Aug 2019

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“Almost the single worst abuser of everybody.”

This was how US President Donald Trump described Vietnam’s approach to trade in an interview in June.

His damning verdict was followed a few days later by an announcement from the US Department of Commerce that it would be imposing duties of up to 456 per cent on Vietnamese steel imports.

Hanoi has been seen as the biggest winner from Trump’s trade war with China, but is now also on the receiving end of a hardening approach from Washington. The change poses a big danger for Vietnam as the country is a trade-dependent economy and the US is its largest export market. Trump has also abandoned the Trans-Pacific Partnership, a proposed agreement between 12 nations from which Vietnam stood to be one of the main winners.

But despite these troubles, ties remain tight between the two former cold war foes as the two rediscover the importance of their relationship against the backdrop of an increasingly assertive China.

Trump welcomes Vietnamese Prime Minister Nguyen Xuan Phuc to the White House in May 2017. Photo: AFP

Instead of reacting disappointedly to the changes in US policy under Trump, Vietnamese leaders have sought to cultivate cooperation. Vietnamese Prime Minister Nguyen Xuan Phuc visited the White House in May 2017, becoming the first leader from Southeast Asia to travel to America for face-to-face talks with the US president since he took office.

Four months later Trump made a two-day state visit to Vietnam during which he met Phuc and Nguyen Phu Trong, general secretary of the ruling Communist Party.

FROM TROOPS TO TRADE

On paper, China is Vietnam’s most important partner, while the US is among the least important, largely due to ideological alliances. This makes the recent level of cooperation, in many respects, extraordinary. Little more than 40 years ago, Vietnam and America fought each other in one of the world’s longest and deadliest wars. But today, under Trump, the most notable point of disagreement is America’s growing trade shortfall with the Southeast Asian nation. According to official US figures, in 1996, America had a trade surplus of US$285 million with Vietnam. But last year, it had a deficit of US$39.5 billion. Trump and his senior aides often raise – publicly and privately – their concerns about the trade imbalance. And in May this year, the US Department of the Treasury added Vietnam – alongside eight other countries including China, Japan, South Korea, Singapore and Malaysia – to a watch list for currency manipulation.

Vietnam is locked in territorial disputes over the Paracel Islands in the South China Sea. Photo: Roy Issa

CONVERGENCES TRANSCEND DIFFERENCES

However, trade has not been enough to drive the two apart. In security and defence, their views and interests are now more convergent than a few years ago, and will continue to take their relationship forward.

In 2013 then Vietnamese president Truong Tan Sang travelled to America to formally establish a “comprehensive partnership”. The agreement was based on “respect for the United Nations Charter, international law, each other’s political systems, independence, sovereignty, and territorial integrity”. It was of both symbolic and substantive significance, especially for Vietnam. By agreeing to build and advance the relationship “on the basis of respect for each other’s political systems”, the US officially accepted and agreed to respect Vietnam’s one-party system. The recognition was important for Hanoi because the Communist Party’s ideological conservatives strongly suspect the US wants to overturn Vietnam’s socialist regime through so-called “peaceful evolution”.

The deal resonated well with the Vietnamese public in a country which, throughout its history, has fought numerous wars against China, Japan, France and America to safeguard its independence, and today is still struggling to defend its sovereignty and territorial integrity in the disputed South China Sea.

SHARED VIEWS

The new approach by America implicitly but pointedly references China, Vietnam’s giant neighbour with whom it has long been locked in territorial disputes over both the Spratly and Paracel islands in the South China Sea. Without doubt, China’s adventurism since Xi Jinping came to power in 2012, including by placing a huge oil drilling platform in Vietnam’s waters in 2014, is a key, if not the most decisive, factor behind the remarkable advancement of the US-Vietnam relationship, notably in security and defence. Both the US and Vietnam have become increasingly wary and critical of Beijing’s actions. In Singapore in 2015, then Vietnamese president Tran Dai Quang warned against the “might makes right” mindset. In April last year, the USS Carl Vinson, a US aircraft carrier, made a landmark port call at Da Nang – the first such visit since 1975. The US has also transferred a Hamilton-class coastguard cutter and six patrol boats to Vietnam, all of which are now very active in Vietnam’s maritime security missions. The cooperation is aimed at maintaining what both sides call a “rules-based order” in the South China Sea, which they believe China now threatens. Beijing’s latest aggressive moves – including sending a seismic survey ship and its armed escort vessels to an area within Vietnam’s exclusive economic zone – will only bring Washington and Hanoi closer.

Beijing’s South China Sea stance is driving Vietnam into America’s arms

TRADE TRUMPS ALL

With Trump, relations often boil down to trade, but here too the two sides have a strong interest in advancing ties. China remains Vietnam’s largest trading partner but the US is its biggest export market. However, Vietnam’s trade interactions with the US are more complementary and, thereby, more beneficial than its ties with China. Stronger economic links with the US and other Western or advanced countries could help decrease Hanoi’s dependence on Beijing both politically and economically. Chinese leaders have refused to adjust their policies to make China’s trade with other countries more balanced and reciprocal, but Trump has been flexible and Hanoi has reciprocated. During Trump’s state visit in 2017, Vietnam agreed to purchase US$12 billion worth of American goods and services. In February Hanoi signed on a deal to buy 110 aircraft from Boeing worth more than US$21 billion, which led to Trump hailing Vietnam’s efforts to balance bilateral trade.

The US president’s harsh criticism of Vietnam in June and his imposition of steel imports therefore shocked many people in Vietnam because just a few months ago, he had lavished praise on his Vietnamese hosts. But again, like it has done since Trump’s election, the Vietnamese government responded positively to Washington’s concerns by vowing to buy more US goods. The convergence of their core interests means it will take more than Trump’s fickle nature to derail the relationship.

Xuan Loc Doan is a senior research fellow at the Global Policy Institute. This is an edited excerpt of an article titled Vietnam-US Relations Flourishing under Trump, published in ISEAS Perspective No 63

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