Can Vietnam thrive under Trump 2.0?
With the potential for a second Trump administration, Vietnam will need to prepare for different scenarios.
As the possibility of Donald Trump re-entering the White House looms larger, policymakers around Southeast Asia are bracing for a repeat of 2016.
Then, Vietnam was among a few countries in the world which managed the first Trump presidency relatively well. During that period, the Vietnam-US relationship continued to prosper. Trump came to Vietnam twice in 2017 and 2019, more than any other Southeast Asian country.
While the US arms embargo on Vietnam was fully lifted under the Obama administration (2009-2017), it was during the Trump presidency (2016-2020) that Vietnam saw significant progress in military cooperation with the US, including military equipment contracts worth around US$100 million and the delivery of the first decommissioned US Coast Guard Hamilton-class cutter. At the same time, Hanoi managed to mitigate damages from his volatile and unpredictable policies.
Hanoi has been praised for reaping the most of Sino-US rivalry by walking the tightrope between the two great powers, but this act will be much harder to perform in the second Trump presidency.
Diplomatic deftness may not be enough
The key reason for Vietnam’s successes then lay in its diplomatic deftness. Vietnam’s then-Prime Minister Nguyen Xuan Phuc was the first Southeast Asian leader to visit the White House in 2017, a move that pleased Trump and eased his concerns about Vietnam’s trade deficit with the US. Hanoi was also active in organising the second summit between Trump and North Korean leader Kim Jong Un in 2019. It also dodged the trade bullet later that year despite being called out as the “single worst trade abuser”.
However, past successes cannot “Trump-proof” Vietnam for the second time. First, the current polarised international environment is far more challenging than in 2016. The increasing tensions between China and the US, along with Trump’s hardline stance on China, significantly reduces the room for Vietnam’s diplomatic manoeuvrability.
Hanoi has been praised for reaping the most of Sino-US rivalry by walking the tightrope between the two great powers, but this act will be much harder to perform in the second Trump presidency. Similar to other countries in the region, Trump’s “either with us or against us” approach and strong demand for loyalty might put Vietnam in a difficult position if the Sino-US relationship continues to deteriorate. Trump’s disdain for multilateral frameworks is contrary to Vietnam’s active engagement with regional institutions like ASEAN. This will complicate Hanoi’s calculations.
The close economic ties between Vietnam and China, partly a byproduct of the trade war, have led to increasing transshipments of Chinese goods via Vietnam to evade US tariffs.
In addition, Trump’s protectionist trade policies also pose a significant risk. Withdrawing the US from the Trans-Pacific Partnership (TPP) on his first day in office in 2017 was a blow to Hanoi, and it is hard to see him embracing Biden’s Indo-Pacific Economic Framework or proposing any new trade initiatives this time.
Furthermore, the US is currently Vietnam’s biggest export market. In 2023, Vietnam ranked third after China and Mexico in the list of countries with the biggest trade deficit to the US, with US$104 billion. Hanoi will have to think hard about how to insulate itself against Trump’s potential trade punishments. The close economic ties between Vietnam and China, partly a byproduct of the trade war, have led to increasing transshipments of Chinese goods via Vietnam to evade US tariffs. While the Biden administration has been lenient, valuing Vietnam’s role in its Indo-Pacific strategy, Trump, who has a greater focus on a domestic agenda, might not be as forgiving.
Domestically, the key bureaucracies responsible for managing the first Trump presidency, the Ministry of Foreign Affairs and the Government Office, have been weakened during the comprehensive anti-corruption campaign since 2021. The Chairman of the Government Office Mai Tien Dung was arrested, while nearly a hundred mid- and senior-level officers at this elite government agency quit in 2022 alone. The former Vice-Prime Minister and Foreign Affairs Minister Pham Binh Minh, instrumental in Vietnam’s foreign policy during the Trump era, was ousted, with dozen of senior diplomats receiving prison sentences.
Bureaucracy less nimble than before
Replacing these cadres, particularly the ones with both expertise and hands-on experience, will take time. Additionally, the newly-appointed bureaucrats will likely play safe given the context of the anti-corruption campaign, which will further affect their ability to make quick decisions or interact effectively with Vietnam’s partners. In conversations with the author, diplomats in Hanoi complained that it is much harder to engage with Vietnamese officials these days. Last May, Western donors sent a letter of complaint claiming that Vietnam forfeited at least US$2.5 billion in foreign aid in the last three years due to administrative paralysis.
Similar to other countries, including the Philippines and India, Vietnam sits on the front line of the US strategy to manage China’s rise, which will likely grant Hanoi a “free pass” from Washington in some cases.
So far, these setbacks have not significantly impacted the country’s foreign policy, evidenced by Vietnam successfully hosting US President Joe Biden, Chinese President Xi Jinping, and Russian President Putin within a year. Yet whether it can withstand a significant external shock, such as a second Trump presidency, remains an open question.
There are, however, slivers of hope. Trump’s bonds to Vietnam during his first term will give Hanoi a head start in securing a stable and reliable relationship with him. Second, US-Vietnam bilateral relations have reached a new high, particularly after the upgrade in relations to a comprehensive strategic partnership last September.
Some positive attributes
As shown in his first tenure, Trump will likely maintain this upward trend, viewing Vietnam as an important partner in the Indo-Pacific. Similar to other countries, including the Philippines and India, Vietnam sits on the front line of the US strategy to manage China’s rise, which will likely grant Hanoi a “free pass” from Washington in some cases. The robust economic aspect of the bilateral relationship, which also includes Vietnamese FDI flows into the US, such as Vinfast and FPT, aligns with Trump’s “Make America Great Again” agenda.
Third, the rise of President To Lam could facilitate a bond between the two strong men, given Trump’s record of bonding well with authoritarian figures, such as the Philippines’ former President Rodrigo Duterte. A 2011 cable leak from the US embassy in Hanoi praised To Lam, then the vice-minister of public security.
Though the US presidential election is still in its early stages, and Trump’s victory is far from certain, Hanoi would be wise to prepare for different kinds of scenarios sooner rather than later. As per other concerned allies and partners, the stakes are simply too high for complacency. Facing Trump 2.0 will be a tough challenge, but if it can manage it as well as it did the first time, Vietnam’s geopolitical position will be much strengthened amidst a new era of unpredictability.
This article was first published in Fulcrum, ISEAS – Yusof Ishak Institute’s blogsite.
