Thayer Consultancy Background Brief:

ABN # 65 648 097 123

Pompeo Unexpectedly Adds
Vietnam to His Itinerary
Carlyle A. Thayer
October 29, 2020

Q1. What issues likely spurred Secretary Pompeo’s sudden trip to Vietnam? What will
the two sides discuss?
ANSWER: According to a Vietnamese media source, on 27 October, just prior to
Secretary of State Mike Pompeo’s arrival in the Maldives, a report circulated in Hanoi
that Pompeo would visit Vietnam. Vietnam’s Ministry of Foreign Affairs confirmed the
report to Vietnamese journalists on Wednesday morning, but it was not until the
following afternoon that the government issued a short official announcement.
The Vietnam Government Portal (28 October) reported that Secretary Pompeo would
visit Vietnam at the invitation of Deputy Prime Minister and Foreign Minister Pham
Binh Minh and that “Pompeo’s visit aims to mark the 25th founding anniversary of the
two countries’ diplomatic relations.” Reuters staff in Hanoi reported that “A
spokesman for Pompeo declined to comment about the announcement of a Vietnam
leg.”
Bill Gertz, writing in the Washington Times (28 October), wrote that “A senior Trump
administration official said the visit is expected to include an important
announcement about U.S.-Vietnam relations in the face of growing regional threats
posed by China…”
One possible development may explain Pompeo’s dash to Hanoi. It concerns a
breakthrough in economic relations that will lead to massive U.S. private sector
investment in Vietnam’s energy sector and Vietnam’s commitment to purchase
billions of dollars of liquified natural gas (LNG) from the United States
On 28 October, Secretary Pompeo revealed to a virtual Indo-Pacific Business Forum
that the U.S. AES Corporation will sign an agreement with PetroVietnam Gas to
develop a $2.8 billion LNG import terminal and power plant in Vietnam. According to
Pompeo, the deal will result in Vietnam’s import of billions of dollars of U.S. LNG each
year.
At the Indo-Pacific Business Forum, U.S. Delta Offshore Energy announced final
agreement had been reached with Bechtel Corp., General Electric and McDermott for
the development of a $3 billion 3.2-gigawatt LNG power plant in Bac Lieu province.
These positive developments came on the heels of testy discussions between the
Vietnam government and a high-powered delegation from the U.S. headed by Adam
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Boehler, Chief Executive Officer of the U.S. International Development Corporation,

to “discuss a broad spectrum of opportunities” including increased investment to the
recently launched ASEAN-United State Mekong Partnership. The U.S. delegation
included officials from the Departments of Commerce and Treasury, Office of the U.S.
Trade Representative (USTR), and the U.S. Export-Import Bank.
The USTR, acting on the direction of President Trump, opened an investigation into
allegations that Vietnam was engaged in currency manipulation to the detriment of
U.S. commerce. On 26 October, Prime Minister Nguyen Xuan Phuc met with Boehler
and bluntly told him “Vietnam is not using exchange rate policy to create a competitive
advantage in international trade.” Prime Minister Phuc asked Boehler to convey to
President Trump and the USTR that the United States should “have a more objective
assessment of reality in Vietnam” with respect to Vietnam’s trade surplus with the
U.S.
Secretary Pompeo will use his platform in Hanoi to tout the U.S. Free and Open Indo-
Pacific strategy and U.S. support in combatting the coronavirus and providing vaccines
and therapeutics in the recovery phase. Pompeo will offer U.S. support to Vietnam to
exploit its marine and hydrocarbon resources in the face of Chinese intimidation.
Pompeo will also use his diplomatic skills to ensure that the LNG deals proceed as
planned by addressing Vietnamese government concerns.
Q2. Pompeo's trips to Sri Lanka and Indonesia have been criticized for pushing an anti-
China stance too forcefully despite reticence in both of those countries on taking a
harder line on China. Will Pompeo find a more receptive audience in Vietnam?
ANSWER: Vietnam will not “go all the way with the USA” by endorsing Pompeo’s shrill
anti-Communist Party of China rhetoric. Vietnam will give its support for a U.S.
presence in the South China Sea with the caveat as long as it contributes to regional
peace and security. Vietnam has a long-established policy of not calling out China by
name. Pompeo will find Vietnam receptive to a U.S. presence that constrains China’s
belligerence. But Vietnam will not agree to overt actions that confront China.
3. Will the current trade tensions between the U.S. and Vietnam, such as the
threatened tariffs for Vietnam’s currency devaluation, derail U.S.-Vietnam
cooperation on other issues?
ANSWER: There is a core among Vietnam’s leadership that distrusts the United States.
They rankle at the USTR investigations into allegations of currency manipulation and
Vietnam’s involvement in the illegal timber trade. Vietnam insists on reciprocity in its
relations with the United States. If, for example, Vietnam gives the green light to U.S.,
investment in its energy sector in order to reduce the trade imbalance, Vietnam also
expects to get something of equivalent value in return. Specifically, Vietnam wants the
U.S. to grant it market economy status, restore its status as a developing country, and
remove tariffs on shrimp, catfish, and aluminium and steel.

Suggested citation: Carlyle A. Thayer, “Pompeo Unexpectedly Adds Vietnam to His

Itinerary,” Thayer Consultancy Background Brief, October 29, 2020. All background
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Thayer Consultancy provides political analysis of current regional security issues and
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