Vietnam upgrades US relations as Biden lands in Hanoi

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Faced with Beijing’s growing assertiveness in the region, Vietnam has raised its relationship with the United States to the highest possible level, bringing its former foe closer to Washington’s orbit.

The United States and the Southeast Asian nation signed a “comprehensive strategic partnership” on Sunday after U.S. President Joe Biden arrived in Hanoi from New Delhi for the G20 summit.

The confirmation of this symbolic but significant partnership, after years of lobbying in Washington, elevates the United States two levels to the highest status in bilateral relations with Vietnam.

This status was previously reserved only for China, Russia, and India, and as of last year, South Korea also retained this status. Vietnam has long avoided such action for fear of angering Beijing.

Nguyen Phu Trong, General Secretary of the Communist Party of Vietnam, said that the partnership between Vietnam and the United States has grown by “leapfrogging”. Biden described Vietnam as “an important force in the world and a leader in this important region.”

Deputy National Security Adviser Jon Finer, who announced the strategic partnership as Biden flew to Hanoi, said the move was “more than just words.” “In a system like Vietnam’s, it’s a signal to their entire government, their entire bureaucracy, about the depth of cooperation and alliance with another country.”

Biden arrived in Vietnam after the G20 summit, where the United States and its Western allies compromised in a joint EU statement on condemning Russia’s invasion of Ukraine.

The United States and its allies are trying to appeal to the Global South to build a global consensus against Russia.

The United States also views developing countries in Asia as critical to countering China’s power in the Indo-Pacific region. Vietnam is seen as a frontline state in the face of China’s growing ambitions in the South China Sea, where Beijing has alarmed many of its neighbors with its sweeping claims.

Biden skipped the Association of Southeast Asian Nations and the East Asia Summit in Jakarta before the G20 summit, and visited Vietnam instead to show the importance the United States attaches to relations with Hanoi.

However, there are some signs of tension between the two countries, with Biden making human rights a “priority” for his administration and Trump warning against interfering in Vietnam’s internal affairs.

The improvement of U.S.-Vietnam relations came nearly half a century after the end of the Vietnam War. After the Communist victory in 1975, Washington imposed a trade embargo on Vietnam that remained in place until 1994.

Peter Mumford, Southeast Asia analyst at Eurasia Group, said the upgraded partnership had as much to do with China’s missteps as it did with U.S. persistence.

“China has some strategic self-harm,” Mumford said, citing increased intimidation of Vietnamese ships in the South China Sea as an example. “This is an unusual and important step for Vietnam and shows how strong Hanoi’s desire is to counterbalance its relationship with China.”

Beijing’s pressure campaign has already pushed the Philippines closer to the United States, with Manila allowing the United States access to four more military bases in the country earlier this year.

Vietnam’s move could unsettle Beijing. Earlier this week, China rushed a senior official to Hanoi ahead of Biden’s scheduled visit. Liu Jianchao, head of the International Liaison Department of the Central Committee of the Communist Party of China, met with Nguyen Phu Trong, and the two sides agreed to “consolidate political mutual trust” during the visit.

“This is a decisive step into the U.S. orbit,” said Simon Tay, director of the Singapore Institute of International Affairs. Hanoi said it would also strengthen ties with Australia, Singapore, Indonesia and Japan.

In addition to its security implications such as potential defense cooperation, the United States’ new status also has economic importance, particularly in key industries such as semiconductors.

Since the 1990s, Vietnam’s economy has shifted from a centralized and regulated economy to a more open model, and the United States is its largest export market. Last year it was Asia’s fastest-growing economy.

“The U.S. business community wants to see continued improvements in tariffs, technology and intelligence transfers,” said Greg Testerman, president of the American Chamber of Commerce in Vietnam.

Companies including Dell, Google, Microsoft and Apple have expanded or are setting up branches in the Southeast Asian country to diversify supply chains away from China.

Major U.S. technology and manufacturing companies, including semiconductor groups, are expected to attend a business meeting on Monday as Vietnam seeks more high-tech and other investment from the United States.

Vietnam’s economic performance has been weaker in recent months, with exports falling as global demand has waned. A broad anti-corruption campaign and a downturn in the real estate sector have also dampened investor confidence.