Strongest in the region?

The election of Donald Trump was met with cautious optimism in Vietnam, and there is every reason for the two countries to continue on a positive trajectory.

Dr Huong Le Thu (Senior Analyst, Defence & Strategy Program, Australian Strategic Policy Institute)

First published in the La Trobe Asia Brief issue 4 - A More Dangerous Place: Asia During the Trump Presidency

The United States Presidency of Donald Trump was initially met with a cautiously positive reception in Vietnam. In 2017, I wrote a report assessing the potential trajectory of the U.S.-Vietnam relations. Rather counter-intuitively, the relationship had a chance to improve despite President Trump’s unusual approach to managing international affairs. Most of that prediction turned out to be true.

While there have been a number of unexpected turns that risked souring the still fragile ties, U.S.-Vietnam relations continue to strengthen. In fact, relative to its neighbours in Southeast Asia, Hanoi seemed to handle the challenges related to Trump’s foreign policy well.

There is also a strong convergence in the strategic priorities of the two nations, with Vietnam emerging as one of the more “like-minded” and reliable partners in the Indo- Pacific region.

Vietnam has hosted President Trump more than any other Southeast Asian nation, who visited Vietnam twice in his first term. The first was in 2017 - the first year of his presidency - while attending the APEC Summit, which remains the only regional diplomacy summit that President Trump has fully attended (unlike the East Asia Summit in Manila that year) to date. The second visit was to attend the second Trump-Kim summit hosted by Hanoi in February 2019.

Donald Trump’s victory in the 2016 U.S. elections surprised most political observers, including those in Vietnam. The country was enjoying a recent upswing in U.S. relations in the later years of the Obama presidency. In May 2016, President Barack Obama visited Hanoi to announce an historic moment of annulling a remaining legacy from the Vietnam War – the embargo on the sale of arms. It was under Obama that the two nations signed a much-

anticipated comprehensive partnership in 2013 when Vietnam’s then-president Tran Truong Sang visited Washington DC. Two years later, Nguyen Phu Trong – first time Vietnam’s Communist Party Secretary General - was hosted in the oval office by President Obama. Despite its flaws, Obama’s Rebalance policy did pivot attention towards Southeast Asia, especially Vietnam, which benefited from a surge in defence assistance funding.

Just as Hanoi was starting to adjust to the momentum in the relationship with the U.S., Washington’s foreign policy was thrown in flux with the election of Trump, creating anxieties in Vietnam about its position on the new President’s priority list.

The worries around Trump’s conduct in international affairs were related to his approach to trade, and his hints that he’d seek to ‘strike a deal’ with China and even with North Korea. This made many think that he might ‘sacrifice’ the South China Sea for quick gains in the Korean Peninsula nuclear issues.

This, of course, did not happen and as the Trump administration’s Asia policy evolved, the South China Sea issues only gained prominence in its emerging Free and Open Indo-Pacific (FOIP) strategy.

Two major stress points were exposed at the beginning of Trump’s presidency: the multilateral trade and U.S.-Vietnam bilateral trade balance.

The Trans-Pacific Partnership (TPP) was something that Hanoi, despite some necessary adjustments in regulations, was looking forward to. This was not only because of the economic value of gaining access to Pacific markets and benefiting from advancing its economy to the standards set by the TPP members. The TPP also carried a strong geostrategic value. Trump’s first decision after taking the office was to withdraw the United States from the TPP. This was a significant disappointment for all the members, not least Vietnam. No other economic alternatives have emerged from Washington since, making America’s Asia strategy hollow on the economic front. The TPP decision has since become a symbol of America’s perceived withdrawal from the region.

The bilateral trade balance also became an issue under Trump, who was adamant about preventing other countries from taking advantage of America. The United States had a large trade deficit with Vietnam. In recent years Vietnam-U.S. trade had increased and in 2016 amounted to US$32 billion. Despite economic concerns, two-way trade kept growing, deepening the U.S. deficit to $55.7 billion by the end of 2019.

To prevent trade imbalances becoming an issue in bilateral relations, Vietnam’s Prime Minister Nguyen Xuan Phuc made an early trip, as one of the first Asian visitors to Trump’s Washington, and signed deals valued at $15–17 billion USD in exchange for technological goods and services, which President Trump described as a ‘win- win’ outcome. But the imbalance remains a thorny issue, as Trump reminded Vietnam after he launched a ‘tariff war’ on China when he warned Vietnam - “the worst abuser of all” - that it would be targeted next.

Despite those challenges, Vietnam and the U.S. share some similarities in their views about the region, in particular their threat perceptions of China.

It was in Da Nang, Vietnam, at the APEC Summit when President Donald Trump spoke about the “Indo-Pacific” for the first time. That speech was a prelude to the administration’s FOIP strategy. His remarks referred to Vietnam’s proud history of independence and sovereignty, alluding to the current struggles over the territorial maritime claims against China.

These comments were well received in Hanoi. The theme of supporting other claimants and denying the PRC’s expansive claims and coercive behaviour in the South China Sea has become the major guiding principle of America’s policy under Trump.

Such a view suits Vietnamese maritime interests, and while the FOIP continues to struggle for regional acceptance and support across Southeast Asia, Vietnam has been particularly more supportive than other actors. And while the general perception of Trump’s America across Southeast Asia has been deteriorating over the past years, views in Hanoi seem to be more lenient towards Trump’s policies than in most of its neighbours.

Under Trump, America has gone through a drastic transformation in its attitude towards China. It has characterised China as its peer competitor and vowed to address many of Beijing’s sins, including intellectual property thefts, unfair trade and debts, and coercive practices.

Washington famously has not taken sides in the South China Sea disputes, but in an unprecedented turn, the State Department has issued three statements condemning China’s coercive actions towards Vietnam and affirming Hanoi’s sovereign rights to exploit natural resources within its claimed Exclusive Economic Zone (EEZ).

Most recently, following Chinese ships sinking Vietnamese, the State Department issued a similar statement condemning China’s actions amidst the COVID-19 pandemic. This form of support has been greatly appreciated in Hanoi.

Donald Trump’s first term was not as disruptive for Vietnam as it was for some other neighbours. But maybe for the reasons less positive: other agendas had higher priority, crises (such as COVID-19) prevented Trump from further expanding his tariff war, and - more simply - expectations were low from the beginning.

Nonetheless, there is every reason for the two countries to continue on a positive trajectory. This is a remarkable turnaround considering the long history of complex relations between Vietnam and the United States.