In a bun cha restaurant in Hanoi’s Old Quarter there is a plastic table and chairs encased in an acrylic box, an homage to Barack Obama who once ate at the restaurant with Anthony Bourdain back in 2016.
No such monuments exist for either Joseph Biden or Donald Trump. Both leaders have visited the capital, yet neither has had quite the impact that Barack Obama did. That said, Obama will not be on the ballot in the United States come November.
Instead, it is set to be a Biden-Trump rematch with the outcome for Vietnam likely to be very different depending on who is returned to the White House.
Trump’s first term
In 2016, after eight years as President of the United States, just months after eating at the hole-in-the-wall restaurant in Hanoi now nicknamed Obama Bun Cha, Barack Obama handed over the keys to the White House to Donald Trump.
In Vietnam this was greeted with enthusiasm–Vietnam was a big fan of Trump.
In fact, a Pew Research Centre survey in 2017 found that Vietnam was just one of a handful of countries of the 37 surveyed where the majority of respondents–58 percent–had confidence in the real estate developer and reality TV star.
This was largely on the back of the robust approach Trump had taken toward China. The bluster with which he had threatened and cajoled Vietnam’s northern neighbour had struck a chord with many Vietnamese.
A number of issues, particularly China’s claims over the South China Sea–known in Vietnam as the East Sea–had ruffled a lot of Vietnamese feathers. As a result, resentment toward China in Vietnam was growing and in tandem so was a fondness for Trump–the enemy of my enemy is my friend.
That said, at the same time Vietnam was in the midst of becoming one of the world’s biggest trading nations. A rise that was set to receive a significant boost from the Trans Pacific Partnership agreement–the TPP–which would have covered 40 percent of global GDP and more than a third of global trade. This would have huge implications for Vietnam in that it had no free trade agreement with the United States to speak of, save for the decades-old Bilateral Trade Agreement signed with the Clinton administration at the turn of the millennium. It was, however, not to be with Trump withdrawing the United States from the TPP in his first week in office.
The downsides of this move for Vietnam, however, were somewhat mooted by the Trump administration’s hostile attitude toward trade with China. The application of tariffs and other assorted trade barriers was pushing firms to diversify out of China and relocate at least some of their business elsewhere with Vietnam well poised to benefit.
Furthermore, this friction with China may have been partially why a summit between Trump and North Korea’s Kim Jong Un took place in Hanoi rather than Beijing. Vietnam was one of very few countries that had good relations with both North Korea and the United States which made the capital a natural fit. This thrust the country into the global geopolitical spotlight garnering broad exposure for brand Vietnam.
With this in mind, In many ways, the Trump administration could be characterised as a bit of a boon for Vietnam with foreign direct investment on an upward trajectory and trade breaking record after record after record.
Biden takes over
But the Trump administration was not to last more than a single term and in 2021, Joseph Biden took over the presidency of the United States. An experienced statesman, Biden, took a more measured approach to foreign policy and trade.
But that’s not to say Trump’s trade war with China had come to an end. Biden, though with less bluster and bombast, would pick up where Trump left off.
During his tenure, Biden would introduce a raft of measures designed to stymie China’s rise. He limited chip exports to the country, banned some investments in Chinese tech development, and moved to limited data transfers to Vietnam’s northern neighbour.
This, too, served Vietnam well.
Determined to develop its own semiconductor industry, Vietnam had been actively courting US tech giants. As they sought to slow their roll on their Chinese investments, Vietnam was quick to put up its hand as a low-cost alternative. Furthermore, its strategic location between China and the US saw both superpowers vying for the country’s attention.
And Vietnam was not above using the unique position it had found itself in to extract concessions from the United States.
When Biden visited the country in September of 2023, Vietnam managed to elicit from the US president a US$2 million commitment for training workers in the semiconductor manufacturing sector.
Furthermore, Vietnam also saw a chance to get the non-market economy label it had been tagged with back in 2002 removed, and in September of 2023, it made an official request, to that effect, to the US Department of Commerce.
This openness toward Vietnam on the part of the US was also being reflected more broadly in the region. Specifically, Biden had initiated the Indo-Pacific Economic Framework. Though possessing many of the same characteristics as the Trans Pacific Partnership agreement, pundits were quick to point out that it was not a free trade agreement in that it didn’t address market access or trade tariffs (at least yet). Still, it looked very much like a signal the Biden administration was resuming the Obama administration’s pivot to Asia.
That said, the IPEF is still only in its early days and will still require a good deal more negotiation. That said, it’s not clear the Biden administration will have the four more years it might need to get a deal done.
A Trump return
If Trump is true to his word, the IPEF will be ‘dead on day one’. This fits with his decision to withdraw the US from the Trans Pacific Partnership and his broader protectionist approach to international trade.
In this vein, his hardline approach to China looks set to continue which could benefit Vietnam if more businesses relocate south. That said, a Trump presidency poses several risks.
At the heart of Trump’s feud with China has been its trade surplus with the United States. This was US$347 billion in 2016 when Trump was elected. At the same time, Vietnam’s trade surplus with the United States was just shy of US$32 billion, a modest sum in comparison. This has, however, ballooned over the last eight years more than three-fold with Vietnam recording a trade surplus of US$104.6 billion in 2023.
With this in mind, whereas in Trump’s first term, Vietnam managed to skate by under the trade radar, circumstances have changed and it’s not unthinkable that Vietnam might not be so lucky this time around.
Furthermore, Trump took particular umbrage with how China handles the value of the Renminbi which is not all that dissimilar to how the State Bank of Vietnam manages the Vietnamese dong–Vietnam has an on-again-off-again relationship with the US Treasury’s currency manipulator watchlist, to which it was on-again as of last November.
Vietnam’s quest to shirk its non-market economy label from the US Department of Commerce could be upended too. Whereas a review is currently underway with a finding expected in July, in the event Vietnam is not redefined as a market economy, it seems unlikely a Trump presidency would be open to entertaining another review.
See also: Unpacked: Vietnam’s Non-Market Economy Review
What’s next?
Eight years after Trump first moved into the White House the global trade landscape has changed considerably. Vietnam, in particular, has become a much more prominent pillar of global supply chains.
In this context, Vietnam may not be able to fly under the radar quite like it has in the past. But that’s not necessarily a bad thing.
Under Biden this could mean greater engagement and capacity building support, under Trump it could mean benefiting from greater trade diversion out of China. That is not to say there aren’t risks. Vietnam’s increasing prominence on the global stage could also draw the spotlight to its own trade practices which are not entirely out of step with China’s.
Either way, the importance of the outcome of November’s election on doing business in Vietnam, should not be underestimated. In this light, to keep track of the latest trade developments make sure to subscribe to the-shiv.