How Will US-Vietnam Relations Develop under Trump?
Photo Credit: The National Interest
By Huong Le Thu

How Will US-Vietnam Relations Develop under Trump?

Nov. 10, 2017  |     |  0 comments

Donald Trump’s presidency thus far has provoked anxiety among the US’ Asian partners and allies. Southeast Asia — a group of small and middle-size states — is particularly concerned about the perceived policy vacuum and fading commitment of the United States. Vietnam is among the countries most closely watching Washington’s policy shifts. How will President Trump’s visit to the region be received? His attendance at the Asia Pacific Economic Cooperation (APEC) Summit in November 2017 in Da Nang, as well as a call in Hanoi, along with his so-far confirmed appearance at the East Asia Summit in Manila, will show whether the US-Vietnam momentum will continue or slow down.

The Context

Vietnam and the US normalized their relations in 1994 after 19 years of hiatus following the withdrawal of American troops from Vietnam in 1975. Since then, there has been a steady progress in multidimensional cooperation. Trade in goods between the two countries amounted to USD 52.3 billion in 2016 whereas trade in services reached USD 3.5 billion in 2015. That is a stagnating figure given that trade back in 1992 amounted to USD 7 million just in one-way exports to Vietnam when Vietnamese goods were still under embargo. Today, the US trade deficit with Vietnam stands at USD 18 billion in June 2017, and nearly 32 billion last year.

Given the two countries’ past conflicts, trust has been an issue in military and defence cooperation as reported by previous administrations. Under the Barack Obama Administration, the bilateral relationship improved significantly. President Obama’s Pivot (later formulated as a Rebalance) to Asia resulted in increased attention to Southeast Asia and particularly to Vietnam. The trust level between the two governments increased in comparison to previous administrations.

President Obama’s personal charisma was an additional factor in the positive image of America in Vietnam, not only among the public, but also among policy-makers. In his visit to Hanoi in May 2016, he was extremely warmly welcomed and he succeeded in what his predecessors did not: responding to Vietnam’s strategic anxiety vis-a-vis China while reassuring Hanoi’s domestic regime of respect and non-interference. In his speech, Obama skilfully addressed the small-state’s psychology by reiterating that every nation is equal regardless of size — the very core of the Vietnamese spirit. Despite the ideational image, Obama played down the issue that has been long considered divisive between the two governments: human rights.

Among the deals Phuc signed was a USD 15-17 billion agreement on the exchange of technological goods and services. President Trump described this win-win outcome as “more jobs for America, more equipment for Vietnam.”

Vietnam was the biggest beneficiary of American defense aid with almost USD 11 million growth during this period. Overall, however, as a region, Southeast Asia experienced a drop in the US budgetary aid in defense, from USD 182 million in 2010 to USD 147 million in 2015. In general, only the Middle East noted an increase from USD 6.7 billion to USD 8.08 billion in the same period. The Obama administration was keen to further pursue advancement of defence relations with Vietnam. In 2009, the US provided foreign military financing to Vietnam worth USD 500,000. By 2015, the amount reached USD 10 million. During his visit to Hanoi in May 2016, Obama announced the full annulment of the arms embargo that had been in place since the war between the two states. The move carried a strong symbolic meaning and opened the door for Vietnam to consider future purchases.

Will US Stay Consistent?

Donald Trump’s presidency opened with certain signals — the withdrawal from the TPP and the end of the Rebalance — that exacerbated Southeast Asian anxiety about American commitment to the region. In fact, after six months, there is little evidence for Trump’s consolidating a strategy towards Asia. Trump’s initial talks with Chinese President Xi Jinping had led many in Southeast Asia to think that he would use the South China Sea as a bargaining chip for Beijing’s cooperation in addressing Pyongyang. However, while the North Korean nuclear crisis has deteriorated, the South China Sea seems to figure low in Trump’s foreign policy agenda. In fact, the North Korean issue retains Trump’s foremost attention.

When Trump became President, Vietnam took a proactive step with a visit by the Vietnamese Prime Minister, Nguyen Xuan Phuc, to Washington in late May 2017, and he was the first Southeast Asian head of state, and the third from Asia (after Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping) to pay a visit to Washington since Donald Trump took office.

Vietnam’s economic agenda remains the top priority when it comes to meeting with Trump. Despite Hanoi’s strategic concerns, bilateral economic relations have been doing well. America remains Vietnam’s largest export market; however, it ranks sixth among the trade partners with which the United States has the largest trade deficits. Bilateral trade from January through May 2017 amounted to USD 16 billion, which constitutes an increase of 9.9 percent over the previous year. US exports grew by 22 percent compared to last year. Phuc’s visit aimed at alleviating some of the Trump administration’s concerns about the growing deficit with Vietnam, which totalled USD 32 billion last year, a fraction of the USD 347 billion deficit with China. Among the deals Phuc signed was a USD 15-17 billion agreement on the exchange of technological goods and services. President Trump described this win-win outcome as “more jobs for America, more equipment for Vietnam.”

In contrast with the Vietnam-US leaders’ exchange one year ago, this meeting avoided values-based talk and was highly transactional in nature. Leaders in Hanoi have taken note of this shift. With such gestures of good will, Vietnam hopes not only to boost bilateral relations, but also to draw Trump’s attention to geoeconomic and geostrategic regional developments.

Unlike the previous administration, human rights have probably declined to be the least issue of concern in the relationship. President Trump has repeatedly proven that concern for human rights is not his priority, both domestically and internationally. Two major factors that will decide the speed and depth of rapprochement are: Trump’s perception on fair and reciprocal trade, and of course, China. The three-way relationship between Vietnam, China, and the US is critical in understanding the whole regional arrangement. How Washington-Beijing relations develop will have decisive influence on the strategic position for Hanoi. The APEC Summit in Da Nang will further shed light on President Trump’s vision of the region.

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