U.S.-Vietnam Relations

U.S.-Vietnam Relations

Updated May 23, 2024
U.S.-Vietnam Relations
Since the establishment of diplomatic relations between the
have limited the types of cooperation the U.S. government
United States and the Socialist Republic of Vietnam in
is willing to undertake, particularly in the security sector.
1995, overlapping strategic and economic interests have led
the two countries to expand ties across a wide spectrum of
Vietnam’s Political Structure
issues. Particularly since 2010, the two governments have
Vietnam is a one-party, authoritarian state ruled by the
formed partnerships on many regional security and
CPV, which sets the general policy direction, leaving most
economic issues, prompted in part by shared concerns about
day-to-day implementation to the government. The two top
China’s increased assertiveness in the region. In 2023, the
leadership posts are the CPV General Secretary and the
United States was Vietnam’s second largest trading partner
Prime Minister, positions currently held by Trong (age 79)
(after China), and Vietnam was the United States’ ninth
and Pham Minh Chinh (64), respectively. Trong has been
largest trading partner. A potential agreement under the
General Secretary since 2011. Under Trong and Chinh, the
U.S.-led, 14-country Indo-Pacific Economic Framework for
CPV and government are continuing the “blazing furnace”
Prosperity (IPEF) initiative, which includes Vietnam, may
anti-corruption campaign Trong first launched a decade ago
further deepen U.S.-Vietnam economic ties. Congress has
and that since 2022 has led to the resignations of two
played a significant role in charting the course of U.S.-
Presidents and several other Politburo members. Although
Vietnam relations during the more than three decades since
corruption is viewed by many analysts as a legitimate threat
the two began normalizing relations in the early 1990s. In
to the CPV’s legitimacy, some perceive the campaign also
particular, Members have been at the forefront of efforts to
as a way for Trong and/or Vietnam’s security establishment
improve relations, highlight human rights conditions, and
to weaken their political rivals.
address unresolved issues from the Vietnam War.
Vietnam’s leaders have tried to diversify the country’s
In September 2023, President Joseph Biden traveled to
export markets and sources of foreign direct investment
Hanoi, where he and Communist Party of Vietnam (CPV)
(FDI) as they seek to become an upper middle-income
Secretary-General Nguyen Phu Trong elevated the U.S.-
economy by 2030 and a high-income developed country by
Vietnam relationship from a “comprehensive partnership”
2045. On foreign policy, Vietnam’s approach has included
to a “comprehensive strategic partnership,” the highest level
of Vietnam’s hierarchy of official partnerships
boosting its defense capabilities and expanding its security
. The
relationship with the United States, Australia, India, and
designation provides top-down blessing inside Vietnam for
Japan as a hedge against China. A stated principle of
the government and ruling party to deepen and expand
Vietnam’s foreign policy is avoiding an over-dependence
areas of cooperation with the United States. The upgrade
on any one country or group of countries. This pursuit of
was accompanied by a host of new and expanded initiatives
balance, combined with a wariness of alarming China, has
and other announcements, including plans for the Secretary
resulted in Vietnam expanding relations with the United
of State and Foreign Minister to meet annually. The U.S.
States incrementally and in a non-linear fashion.
government pledged to support Vietnam’s development of
its semiconductor industry (including with $2 million in
Figure 1. Vietnam Map and Selected Statistics
U.S. government funds) and digital infrastructure ($12
million), as well as physical infrastructure construction and
climate change mitigation efforts ($11 million). Following
the summit, a U.S. news outlet reported the two sides had
begun discussing a possible large-scale arms deal, which
likely would be subject to congressional review.
The pace and extent of further 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, and Hanoi and Beijing share

interests on many issues. Second, although opinion polls
Source: Map, CRS; Other information, Central Intelligence
show the Vietnamese public holds positive views of the
Agency, The World Factbook, 2024.
United States, many Vietnamese officials suspect that the
United States’ goal is to end the Vietnamese Communist
China-Vietnam Relations
Party’s monopoly on power though “peaceful evolution.”
Vietnam’s relationship with China is its most important
Third, U.S. concerns about Vietnam’s human rights record,
bilateral relationship. The two countries have Communist
which has deteriorated over the past decade, historically
Party-led political systems that provide a party-to-party
communication channel and engender similar official
world-views. China is Vietnam’s largest trading partner.
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U.S.-Vietnam Relations
Two months after hosting Biden, Vietnam welcomed
U.S. business interest in Vietnam has grown, fueled by
Chinese President Xi Jinping to Hanoi, where the two
Vietnam’s relatively low wages, market-oriented economic
countries signed over 30 cooperation agreements. The Sino-
reforms, and political stability. Several trends have added to
Vietnamese relationship, however, is prone to tension,
investor interest, including rising production costs in China,
particularly over Chinese dams on the upper Mekong River,
U.S.-China trade tensions and supply chain diversification,
which affect Vietnam’s agricultural center, and the two
and the entry into force of regional trade agreements among
countries’ competing claims in the South China Sea. CPV
Vietnam and key trading partners in East Asia. In 2022, U.S.
at its 2021 Party Congress initiated a thorough
foreign direct investment in Vietnam was $3.5 billion, up
modernization of Vietnam’s military forces. The U.S.
27% from 2021 (latest data available). Some U.S. business
government has sought to improve Vietnam’s ability to
leaders assert that Vietnam’s weak infrastructure, lack of
maintain maritime domain awareness and patrol its coastal
regulatory transparency, weak labor rights, inadequate
waters. The Obama, Trump, and Biden Administrations
protection of intellectual property rights, barriers to digital
have provided Vietnam with 24 new coast guard patrol
trade, and other trade issues pose challenges.
vessels, unmanned aircraft systems, coastal radar, and two
The U.S.-Vietnam 2007 Trade and Investment Framework
decommissioned U.S. Coast Guard Hamilton-class cutters,
Vietnam’s largest coast guard ship
Agreement (TIFA) is the primary platform for discussing
s.
bilateral trade and investment issues. The September 2023
Vietnam and the War in Ukraine
upgrade of the U.S.-Vietnam relationship could increase
opportunities to expand bilateral economic engagement,
Vietnam has maintained a low-profile position on Russia’s
including increasing U.S. investment in Vietnam and
2022 invasion of Ukraine, abstaining on votes at the United
expanding Vietnam’s manufacturing capacity in sectors of
Nations to condemn Russian aggression. Russia supplied
U.S. interest, such as semiconductors and critical minerals.
around 80% of Vietnam’s arms imports from 2000 to 2021.
Despite Vietnam’s purchases of Russian defense articles,
Following the upgrade of bilateral relations, the Commerce
neither the Trump nor Biden Administration has determined
Department initiated a review of Vietnam’s nonmarket
that Vietnam has engaged in a “significant transaction” with
economy (NME) designation under U.S. trade law. The
Russia’s security sector, a determination that under U.S.
Vietnamese government seeks to lose its NME status,
law would require the President to impose sanctions.
arguing that the country’s economic reforms implemented
over the last two decades should be sufficient to label
Human Rights
Vietnam as a market economy. Opponents, including some
The CPV maintains an extensive organization that allows it
Members of Congress, have raised concerns over Vietnam’s
to monitor the daily activities of citizens. For the past three
close economic ties to China and lack of labor rights as
decades, the CPV appears to have followed a strategy of
reasons for maintaining Vietnam’s NME status. Commerce is
permitting many forms of personal and religious
expected to publish its final decision in July 2024.
expression, while selectively repressing individuals and
organizations that it deems a threat to the party’s monopoly
U.S. Foreign Assistance to Vietnam
on power. Over the past decade, according to many
The Biden Administration has requested just over $205
observers, repression against dissenters has worsened, and
million for assistance to Vietnam for FY2025, roughly the
the government has increased its legal and technological
same level as in FY2023 and FY2024. One aim of this
capacity to monitor Vietnamese citizens’ social media
assistance is remediating the Vietnam War-era damage from
the U.S. military’s use of Agent Orange and its
activity. In the 118th Congress, the Vietnam Human Rights
Act (H.R. 3172) would prohibit U.S. assistance to
accompanying dioxin defoliant over Vietnam between 1961
Vietnam’s Ministry of Public Security and require the
and 1971. A 2003 study estimated 2.1-4.8 million
executive branch to put more emphasis on ensuring internet
Vietnamese were exposed to Agent Orange and/or dioxin.
freedom in Vietnam. In its 2023 Trafficking in Persons
Since 2007, Congress has appropriated over $500 million for
Report, the State Department upgraded Vietnam from “Tier
dioxin removal and related health care services. A joint
3” to “Tier 2 Watch List” for making “achievements” in its
dioxin cleanup project in Da Nang was completed in 2017. In
efforts to eliminate trafficking.
2020, the two governments developed a 10-year remediation
plan for cleaning up the Bien Hoa airbase, with an estimated
Economics and Trade
cost of up to $450 million. The Vietnamese government has
Over the last decade, Vietnam has emerged as a major
pressed the United States to do more to remove dioxin and
manufacturing center and has risen to become one of the
help victims of Agent Orange.
United States’ top 10 trading partners. Based on U.S. trade
Bilateral cooperation in locating U.S. military personnel
data, bilateral trade in goods was $124 billion in 2023,
missing in action (MIA), a program that has been in
down 11% from 2022. The U.S. bilateral trade deficit in
operation for over three decades, has been one of the
goods with Vietnam in 2023 ($104 billion) was the United
centerpieces of the bilateral relationship. Since 2020,
States’ third largest. Vietnam is a major source for
Congress has appropriated $7 million for the Defense
consumer electronics, furniture, semiconductor and parts,
Department to help Vietnam’s Defense Ministry account for
apparel, and footwear imports. It is the second-largest
some of the approximately 300,000 Vietnam War-era
source of U.S. clothing imports, after China. Top U.S.
Vietnamese MIA personnel.
goods exports to Vietnam are cotton, civilian aircraft and
parts, semiconductors, and various agricultural goods. The
Mark E. Manyin, Specialist in Asian Affairs
United States maintains a surplus in bilateral services trade,
Liana Wong, Analyst in International Trade and Finance
which in 2023 was around $1.7 billion.
IF10209
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U.S.-Vietnam Relations

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https://crsreports.congress.gov | IF10209 · VERSION 21 · UPDATED