Updated November 15, 2022
U.S.-Vietnam Relations
Since the establishment of diplomatic relations between the
Vietnam’s approach has included boosting its defense
United States and Vietnam in 1995, overlapping strategic
capabilities and expanding its security relationship with the
and economic interests have led the two countries to expand
United States—as well as with Japan, India, and
ties across a wide spectrum of issues. Particularly since
Australia—as a hedge against China’s increasing influence
2010, the two governments have formed partnerships on
in Southeast Asia. However, a stated principle of Vietnam’s
many regional security and economic issues, prompted in
approach since the late 1980s has been to maximize its
part by shared concerns about China’s increased
freedom of action by avoiding an over-dependence on any
assertiveness in the region. In 2021, the United States was
one country or group of countries. This pursuit of balance,
Vietnam’s second largest trading partner (after China), and
combined with a wariness of alarming China, has resulted
Vietnam was the United States’ ninth largest trading
in Vietnam expanding relations with the United States
partner. A potential agreement under the U.S.-led, 14-
incrementally and in a non-linear fashion.
country Indo-Pacific Economic Framework for Prosperity
(IPEF) initiative, which includes Vietnam, may further
deepen U.S.-Vietnam economic ties.
The pace and extent of the improvement in bilateral
relations is limited by several factors. First, Vietnam
usually does not undertake large-scale diplomatic moves—
especially with the United States—without first calculating
China’s likely reaction. Second, although opinion polls
show the Vietnamese public holds positive views of the
United States, many Vietnamese officials suspect that the

United States’ long-term goal is to utilize a “peaceful
Source: Map, CRS; Other information, Central Intelligence Agency,
evolution” strategy to end the Vietnamese Communist
The World Factbook, 2022.
Party’s monopoly on power. Third, U.S. concerns about
Vietnam’s human rights record, which has deteriorated over
China-Vietnam Relations and South
the past decade, remain a barrier to improving relations.
China Sea Tensions
China is Vietnam’s most important bilateral relationship.
Congress has played a significant role in influencing the
The two countries have Communist Party-led political
course of U.S.-Vietnam relations during the more than three
systems that provide a party-to-party channel for
decades since the two countries began normalizing relations
communication and engender similar official world-views.
in the early 1990s. Some Members have been at the
China is Vietnam’s largest trading partner. The Sino-
forefront of efforts to highlight human rights conditions in
Vietnamese relationship, however, is prone to occasional
Vietnam, as well as unresolved issues remaining from the
tension. For over a decade, disagreements have flared over
Vietnam War.
the two countries’ competing claims in the South China
Vietnam’s Political Structure
Sea, particularly China’s claims to much of Vietnam’s
claimed Exclusive Economic Zone (EEZ). China’s actions
Vietnam is a one-party, authoritarian state ruled by the
in the South China Sea prompted the VCP at its 2021 Party
Vietnamese Communist Party (VCP). In practice, the VCP
Congress to initiate a thorough modernization of Vietnam’s
sets the general direction for policy, leaving most of the
military forces. Vietnam also has sought to boost relations
day-to-day implementation to the government. The two top
with maritime powers. The U.S. government has sought to
leadership posts are the VCP General Secretary and the
improve Vietnam’s ability to maintain maritime domain
Prime Minister, positions currently held by Nguyen Phu
awareness and patrol its coastal waters. The Obama,
Trong (age 78) and Pham Minh Chinh (63), respectively.
Trump, and Biden Administrations have provided Vietnam
Trong has been General Secretary since 2011, making him
with 24 new coast guard patrol vessels, unmanned aircraft
the longest-serving leader of the VCP since the 1980s.
systems, coastal radar, and two decommissioned U.S. Coast
Guard Hamilton-class cutters, Vietnam’s largest coast
Under Trong and Chinh, the VCP and government are
guard ships.
continuing the anti-corruption campaign Trong first
launched a decade ago. Vietnam’s leaders have tried to
Vietnam and the War in Ukraine
diversify the country’s export markets and sources of
Vietnam has maintained a low-profile position on Russia’s
foreign direct investment as they pursue stated goals of
2022 invasion of Ukraine and has abstained on votes at the
becoming an upper middle-income economy by 2030 and a
United Nations to condemn Russian aggression. Russia
high-income developed country by 2045. On foreign policy,
supplied around 80% of Vietnam’s arms imports from 2000
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U.S.-Vietnam Relations
to 2021. Moreover, straining relations with Moscow could
wages, recent economic reforms, and political stability
violate Hanoi’s strategic commitment to maintaining
make the country an attractive place for foreign direct
balance in its relations with the world’s major powers.
investment (FDI). U.S. companies are among the largest
Despite Vietnam’s purchases of Russian defense articles,
sources of FDI in Vietnam. At the same time, some U.S.
neither the Trump nor Biden Administration has determined
business leaders assert that Vietnam’s weak infrastructure,
that Vietnam has engaged in a “significant transaction” with
lack of regulatory transparency, weak labor rights,
Russia’s security sector, a determination that under U.S.
inadequate protection of intellectual property rights,
law would require the President to impose sanctions.
restrictive data policies, and other trade barriers poses
challenges.
Human Rights
The VCP maintains an extensive country-wide organization
The U.S.-Vietnam 2007 Trade and Investment Framework
that allows it to monitor the daily activities of citizens. For
Agreement (TIFA) is the primary bilateral platform for
the past three decades, the VCP appears to have followed a
discussing bilateral trade and investment issues. The IPEF,
strategy of permitting many forms of personal and religious
launched in 2022, could provide another such forum. In
expression, while selectively repressing individuals and
2020, the Trump Administration launched investigations of
organizations that it deems a threat to the party’s monopoly
Vietnam’s timber trade and designated Vietnam as a
on power. While the VCP has allowed people to engage in
currency manipulator. The two governments have since
private enterprise and religious observance, it has cracked
reached agreements on both matters. Vietnamese
down on what it labels as anti-government activity. Over
companies have accused the United States of discriminatory
the past several years, according to many observers,
trade restrictions designed to reduce Vietnam’s exports to
repression against dissenters and protestors has worsened,
the United States. U.S. labeling regulations, along with U.S.
and the government has increased its legal and
antidumping and countervailing duties on imports of
technological capacity to monitor Vietnamese citizens’
Vietnamese catfish, have been a longstanding source of
social media activity. In the 117th Congress, the Vietnam
friction, and the subject of ongoing dispute settlement at the
Human Rights Act (H.R. 3001) would, among other things,
World Trade Organization (WTO).
prohibit U.S. assistance to Vietnam’s Ministry of Public
Security, and require the executive branch to put more
U.S. Foreign Assistance to Vietnam
emphasis on ensuring internet freedom in Vietnam.
Congress appropriated just over $180 million in U.S.
assistance for Vietnam for FY2022, about 6% more than the
In its 2022 Trafficking in Persons Report, the State
Biden Administration requested and about $10 million
Department downgraded Vietnam to “Tier 3,” the lowest
more than it appropriated in FY2021. One component of
level, for no longer making “significant efforts” to meet
this assistance is remediating the Vietnam War-era damage
“the minimum standards” for eliminating trafficking.
from the U.S. military’s use of Agent Orange and its
President Biden later waived restrictions on bilateral aid
accompanying dioxin defoliant over Vietnam between 1961
that could have been imposed due to the Tier 3 ranking.
and 1971. A 2003 study estimated 2.1 to 4.8 million
Vietnamese were exposed to Agent Orange and/or dioxin.
Economics and Trade
Since 2007, Congress has appropriated over $380 million
Over the last decade, Vietnam has emerged as a major
for dioxin removal and related health care services. About
manufacturing center and has risen to become one of the
70% has been used for dioxin removal. A joint dioxin
top 10 trading partners for the United States. Rising
cleanup project in Da Nang was completed in 2017. In
production costs in China and the entry into force of
2020, the two governments developed a 10-year
regional trade agreements among Vietnam and key trading
remediation plan for cleaning up the Bien Hoa airbase, with
partners in the Asia-Pacific contributed to shifts in regional
an estimated cost of up to $450 million. The Vietnamese
supply chains and increasing investment in Vietnam. Based
government has pressed the United States to do more to
on U.S. Census Bureau data, bilateral trade in goods was
remove dioxin and help victims of Agent Orange.
nearly $113 billion in 2021, up 26% from 2020. The United
States’ bilateral trade deficit in goods with Vietnam in 2021
In addition, the FY2021 NDAA (P.L. 116-283) authorized
($90.9 billion) was the United States’ third largest. Vietnam
$2 million for the Defense Department to help Vietnam’s
is a major source for electrical machinery, furniture,
Defense Ministry account for some of the approximately
mechanical appliances, apparel, and footwear imports.
300,000 Vietnam War-era Vietnamese military personnel
Notably, it is the second-largest source of U.S. clothing
missing in action. Bilateral cooperation in locating U.S.
imports, after China. Top U.S. goods exports to Vietnam
MIA, a program that has been in operation for over three
are electronic integrated circuits, cotton, electronic and
decades, has been one of the centerpieces of the bilateral
communication devices, and soybeans. The United States
relationship.
maintains a surplus in bilateral services trade, which in
2021 was around $1.4 billion.
Mark E. Manyin, Specialist in Asian Affairs
Liana Wong, Analyst in International Trade and Finance
Ongoing U.S.-China trade tensions and supply chain
vulnerabilities have increased U.S. business interest in
IF10209
Vietnam as an alternative supplier. Vietnam’s relatively low


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U.S.-Vietnam Relations


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https://crsreports.congress.gov | IF10209 · VERSION 13 · UPDATED

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