Thayer Consultancy Background Brief:

ABN # 65 648 097 123

Whither U.S.-Vietnam Relations
Under a Trump Administration?
Carlyle A. Thayer
November 9, 2020

We are completing a report on relations between the United States and Vietnam. We
request your analysis of why the U.S. has initiated investigations by the Office of the
United States Trade Representative against Vietnam at the same time as the U.S. is
trying to upgrade relations with Vietnam to counter China’s influence in the region.
What are the implications of this seemingly contradictory policy on the in-coming
Biden Administration?
ANSWER:
In 2017-18, the Trump Administration identified Vietnam as a potential strategic
partner in the Indo-Pacific in its major policy documents – National Security Strategy,
National Defence Strategy of the United States, and Indo-Pacific Strategy. Vietnam’s
Prime Minister Nguyen Xuan Phuc was the first government leader from Southeast
Asia to meet President Trump in The White House. President Trump attended the
APEC Summit in Da Nang and then made an official visit to Hanoi. Trump and President
Tran Dai Quang agreed to enhance the comprehensive partnership struck during the
Obama Administration. The high point in relations came in February 2019 when Hanoi
hosted the second Trump-Kim Jong-un summit.
When Trump came into office Vietnam ranked fifth among countries with a trade
surplus with the U.S. and this soon became a bone of contention as the Office of the
United States Trade Representative (USTR) sought to even the balance sheet. Trump’s
tariff war with China exacerbated the situation as Chinese companies sought to avoid
the tariffs by trans-shipping goods through Vietnam. In March 2018, the US imposed
tariffs of aluminium and steel from Vietnam that originated in China.
Nonetheless, Vietnam’s trade surplus kept growing. In June 2019, President Trump
stated in an interview with Fox Business News, "A lot of companies are moving to
Vietnam, but Vietnam takes advantage of us even worse than China. It's almost the
single worst abuser of everybody.” In February, the US removed Vietnam’s
designation as a developing nation.
In November 2017, during President Trump’s state visit to Vietnam, the two leaders
agreed to a new three-year Plan of Action for Defense Cooperation, 2018-2020. During
this period Vietnam hosted the second visit of a U.S. nuclear-powered aircraft carrier
and was the beneficiary of $130 million in Foreign Military Sales (including two former
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U.S. Coast Guard cutters), $150 million under the Foreign Military Financing program
and additional funding under the Indo-Pacific Maritime Security Initiative.
The decision by the USTR to commence investigations into allegations that Vietnam
manipulated its currency to gain a commercial advantage and that Vietnam exported
wood products that were illegally obtained is an illustration of dysfunction in the
Trump Administration’s implementation of its national security policy. This decision
undercut nearly four years of Trump Administration efforts to enlist Vietnam as a
strategic partner in its Free and Open Indo-Pacific strategy.
There are long-standing economic irritants in the bilateral relations between Vietnam
and the United States that pre-date the Obama and Trump Administrations. The US
continues to withhold market economy status from Vietnam or lift tariffs on
the import of Vietnamese shrimp and catfish. Under the Trump Administration the
two sides agreed to an Action Plan to address the imbalance in trade and then the
USTR launched its two investigations.
A Biden Administration will restore the National Security Council as the coordinating
agency for government policy implementation. A Biden Administration will jettison
Trump's transactional approach to bilateral relations and its almost ideological
fixation on trade imbalances and engage with Vietnam on a more pragmatic basis.

Suggested citation: Carlyle A. Thayer, “Whither U.S.-Vietnam Relations under a Trump

Administration?” Thayer Consultancy Background Brief, November 9, 2020. All
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.