Vietnam’s Relations with America, Then and Now

 By Henry Srebrnik, [Saint John, N.B.] Telegraph-Journal

You know you’re getting old when you realize that April 30, 1975, was half a century ago. That’s the day the Vietnamese Communists marched into Saigon (now Ho Chi Minh City), ending the long, brutal Vietnam War.

For people of my generation, as young adults it was probably our defining political moment. I entered a Canadian university as it began to gather steam, received my BA at the height of the fighting, and as a graduate student at an American university, received another degree the year American troops left South Vietnam. Two years later, the war came to an end, leaving a devastated moonscape of a nation.

Like millions of other college students, I got caught up in the anti-war movements of the time. We turned out to be right. The last time I was in Washington I paused at the Vietnam Veterans Memorial, which lists the names of the more than 58,000 Americans who lost their lives during the conflict. (Four are from my wife’s high school.)

As many as two million Vietnamese civilians on both sides, as well as 1.1 million North Vietnamese and Viet Cong Communist fighters, were also killed. But America’s ally, the southern regime, was vanquished. Its last president had fled the previous day.

Between 1968 and 1975, a greater tonnage of bombs was dropped on this fairly small area than in all theatres in the Second World War. But the Vietnamese are a resilient, highly nationalistic people, and when it ended the two parts of the country, divided in 1956 between a determined Communist north, supported by China and the Soviet Union, and a corrupt American-supported south, were finally unified by the victorious North Vietnamese Communists.

Fast forward 50 years, and Vietnam is arguably one of the safest places in the world for American visitors. Today far more fearful of China, and no longer particularly close to a post-Soviet Russia – though President Vladimir Putin did pay a state visit in June 2024 -- relations with the United States have become relatively cordial.

In January the country’s new Communist Party general secretary, To Lam, embarked on a program to slash bureaucracy and fight corruption and graft. The country's 63 provinces and municipalities are being reduced to 34, and government ministries and agencies cut from 30 to 17. This year, 100,000 government employees are being laid off.

Today’s Vietnam remains a one-party Communist state, but its authoritarian leadership has embraced capitalism. Hanoi has embarked on an ambitious plan to build an upper-income, knowledge-and-tech-based economy by the year 2045.

Vietnam has low labour costs and a young and large workforce, with 58 per cent of the population of almost 100 million younger than 35 years old, making the country an attractive site for investment.

The economy has been growing at a steady five per cent. The World Bank last October forecast that Vietnam would show the strongest growth of the emerging economies in Southeast Asia. Economic growth is expected to reach 6.5 per cent this year, and the country is aiming for annual growth rates in excess of eight per cent and double-digit growth from 2026 onwards.

In September 2023, Washington and Hanoi upgraded their diplomatic relations, signing a Comprehensive Strategic Partnership for Peace, Cooperation and Sustainable Development. The U.S. is Vietnam’s second-biggest trading partner – China is first -- and its largest export market. 

All that has been put at risk now that Donald Trump is in the White House and has launched a global trade war. Hanoi is accused of currency manipulation and trade circumvention. A 46 per cent tariff on some Vietnamese exports has been suspended until July, but remains on the table.

The problem is this: Chinese firms, to evade the extremely large American tariff on their goods, have been using Vietnam as a go-between. Trump wants to stop this by extending the economic pushback onto Vietnam.

Vietnam is particularly vulnerable as the country holds the third-largest trade surplus with the U.S. in the world. Bilateral trade in 2024 neared US$150 billion, with Vietnam enjoying a substantial surplus of US$124 billion, more than triple the US$38 billion recorded in 2017. This sharp increase stems largely from the relocation of manufacturing from China to Vietnam, to bypass American tariffs.

With its trade surplus with the U.S. now comprising nearly a third of its GDP, Hanoi must tread carefully to safeguard its economic gains. It won’t be easy. Vietnam dispatched deputy prime minister Ho Duc Phoc in early April to Washington to plead his country’s case and offered to eliminate all tariffs on U.S. imports to placate Trump.

 But Peter Navarro, President Trump’s senior counsellor on trade and manufacturing, said that Vietnam’s offer was meaningless, because it would not address the deficit in trade where Vietnam sells $15 worth of goods to the U.S. for every dollar it buys.

He also claimed that one-third of all Vietnamese exports to the U.S. were actually Chinese products, trans-shipped through Vietnam to avoid U.S. tariffs, though detailed trade studies actually put it at between seven and 16 per cent.

So Vietnam is once again on the frontline in a new American battle, though in an entirely different way than 50 years ago. Is Vietnam again being asked to choose between America and China? It’s not one it wants to make.