The elevation of Vietnam-U.S. relations to a Comprehensive Strategic Partnership in 2023 marked an important milestone. What does this mean for U.S. enterprises investing in Vietnam?

The U.S.-Vietnam Comprehensive Strategic Partnership has greatly benefited business and investment ties, serving to deepen bilateral collaboration in semiconductor development, the digital economy, cyberspace, energy, and critical minerals, among others. In June last year, our two countries held the inaugural Comprehensive Strategic Partnership Economic Dialogue, in which we discussed avenues for cooperation across these economic and policy fronts.

The U.S. private sector’s continued enthusiasm for Vietnam has been evident in the USABC’s recent Vietnam Business Mission, in which we brought a record of 64 companies to meet with Vietnamese officials—all of whom were eager to engage with our companies. Our delegation was honored to secure a meeting with Party General Secretary To Lam, underlining Vietnam’s concerted efforts to bolster economic ties. We also met with Prime Minister Pham Minh Chinh, Vice Chairman Vu Hong Thanh of the National Assembly, and key ministers. Vietnam’s leaders conveyed a clear and consistent message: the country is committed to proactively engaging with the U.S. private sector and addressing its trade imbalance with the U.S..

This past year, two-way goods trade between our two countries reached US$149.7 billion—up 20.4% from 2023. This makes Vietnam the United States’ eighth-largest trading partner. The U.S. is also Vietnam's largest export market. The elevation of our ties to a Comprehensive Strategic Partnership was integral in bringing our economic and commercial relationship to where it is now.

USABC has been a cornerstone in advancing economic ties between our two nations. Which sectors offer the greatest promise for Vietnam-U.S. business cooperation over the next 5 to 10 years?

At a conference in early 2015 marking the twentieth anniversary of diplomatic relations between the United States and Vietnam, Vice Foreign Minister Ha Kim Ngoc urged our two countries to move beyond bilateral cooperation to regional and global collaboration, a strategy that our governments pursued for the next decade. We can take this concept further, and deepen our collaboration on regional security, global peacekeeping, human health and pandemic prevention, and mitigation and adaptation to climate change.

Prime Minister Pham Minh Chinh (right) shakes hands with USABC President and CEO Ted Osius during a reception for the U.S.-ASEAN Business Council in Hanoi, March 2025

In an increasingly techno-nationalist global landscape, Vietnam also has an opportunity to invest in the development of its digital ecosystems, which can help the country achieve its ambitious growth targets. During a September 2024 roundtable for business executives hosted by USABC, General Secretary (and then-President) To Lam emphasized the great potential of the Vietnam-U.S. Comprehensive Strategic Partnership and highlighted key areas for cooperation, such as digital transformation, high-tech industries, and sustainable energy transition and development. He reinforced a clear message that the Government of Vietnam views digital transformation and technology development as key drivers in the next chapter of Vietnam’s economic development journey. Vietnam doesn’t want to be caught in a middle-income trap, but rather to vault forward with an innovation economy.

Vietnam is investing in science and technology as a key driver for economic growth but needs new tools. The U.S. can be a strong partner for training engineers and in fields like artificial intelligence, biotechnology, and quantum. Meanwhile, with cloud technologies, Vietnam can train its scientists using global data; cloud enables economies of scale and will enable Vietnam to advance in artificial intelligence and other high-tech fields.

We welcome the news from earlier this year that Saigon Asset Management (SAM) will be launching a US$1.5 billion, 150-megawatt data center hub project in Vietnam, which will be the country’s largest data center facility upon completion. This is a perfect area for expanded bilateral cooperation, which could involve increased U.S. investment in data centers or the sharing of technical expertise.

Drawing upon your tenure as U.S. Ambassador, what do you regard as the most transformative shift in Vietnam’s business landscape since concluding your diplomatic service?

Vietnam had a strong year in 2024, exceeding both domestic and international expectations: GDP growth was 7.09%, driven by exports and foreign investment inflows, while foreign investment reached US$38.23 billion, with 67% directed to manufacturing. However, Vietnam’s trade surplus with the U.S. rose to a record high of US$123.4 billion. Vietnam now has the third-highest trade surplus with the U.S. of any country in the world, after China and Mexico. I might consider this surplus to be one of the most astonishing developments in our bilateral economic relationship since the conclusion of my tenure as ambassador—one that is simultaneously a testament to Vietnam’s ambitious growth strategy and a figure that the U.S. would like to see balanced with its own exports to Vietnam.

Taking a step back, the U.S. and Vietnam both want the bilateral relationship to continue to evolve. As mentioned, the U.S. government would like America’s trade deficit with Vietnam to decrease, while Vietnam would like to obtain market economy status.

Just before our visit to Hanoi for this year’s USABC Vietnam Business Mission, Industry and Trade Minister Nguyen Hong Dien visited the U.S., where Vietnamese and U.S. companies signed cooperation agreements and purchase contracts including the acquisition of machinery, equipment, raw materials, services, and goods valued at more than US$4 billion, and pledged to purchase Boeing and Lockheed aircraft, aviation services, oil and gas extraction, and imported petrochemical products totaling over US$50 billion. Two weeks later, Vietnam announced tariff reductions on key U.S. exports, including liquified natural gas, automobiles, ethanol, and ethane. The cumulative value of the economic and trade agreements established between the firms of both countries, set to be implemented starting in 2025, is projected to reach US$90 billion.

The import tariff rates on the products that the Vietnamese government decided to lower are its most favored nation rates. Therefore, all nations with which Vietnam does not have free trade agreements – including the U.S. -- will have better market access to Vietnam’s domestic market than before. The many nations that do have FTAs with Vietnam already have low or zero import tariffs on their products exported to Vietnam.

Vietnam’s recent moves are smart business and smart politics. The country is already choosing responses that could head off choices by the U.S. government to increase import tariffs on Americans for importing products made in Vietnam. By preemptively lowering its own tariffs and “buying American,” Vietnam will be able to focus on its own domestic economic fundamentals, such as strengthening the competitive factor advantage in its domestic ecosystems. Vietnam can work with local and foreign private sector players in its domestic market to further enhance its global trade competitiveness.

Vietnam ranks among ASEAN’s most dynamic economies, yet it continues to face challenges in refining its business environment. What strategies do you contemplate to support Vietnam in overcoming these obstacles?

Vietnam can employ several mechanisms to refine its business environment, boost economic resilience, and deepen regional integration.

First, the country can work to negotiate new trade agreements or trade deals. These can include rules on investment protection, intellectual property, dispute resolution, and other new issues that have emerged in the past few years.

Second, the country can deepen supply chains in critical minerals. Vietnam has substantial reserves of critical minerals and has the world’s second-largest reserve of rare earths. Other comprehensive strategic partners—including Indonesia, the Philippines, and China—also possess substantial reserves of critical minerals. Given the increased demand for such minerals, whether for electric vehicles or semiconductors, it will be integral to explore new ways to jointly strengthen these supply chains.

Third, Vietnam can continue to deepen digital frameworks with partners, including by furthering its active engagement in negotiations for ASEAN’s Digital Economy Framework Agreement (DEFA). Within DEFA, priorities can be the creation of a harmonized framework and trusted digital ecosystem, along with advocating for the adoption of international standards for cross-border payments.

And fourth, Vietnam can cooperate with partners to accelerate its energy transition. This includes streamlining the flow of green energy, strengthening regional grid infrastructure with geographically proximate partners, sharing technical expertise, and reducing energy costs for consumers and key industries.

One of Vietnam’s advantages is that it has positioned itself at the center of a web of free trade agreements. When USABC visited Hanoi in March, Prime Minister Pham Minh Chinh asked the U.S. to consider an upgrade to our current bilateral trade agreement, especially considering our new Comprehensive Strategic Partnership. Vietnamese tariffs need to be on a most-favored-nation basis so they would apply to all. Further reducing tariffs specifically on U.S. products would require this upgrade, which the U.S. could use to show that it has a proactive, positive trade agenda with key developing countries. Rewards for the U.S. would include reduced tariffs on U.S. agricultural products, a politically important sector.

What advice would you give Vietnamese businesses looking to enter or expand in the U.S. market?

As mentioned earlier, we encourage Vietnamese companies to consider investing in and deepening their engagement with the U.S.. Doing so will not only serve to address Vietnam’s trade surplus with the U.S.—which has become a priority for Vietnamese leaders—but it will also bolster economic ties between our two countries, which is an integral part of our ever-strengthening bilateral relationship.

Thank you very much!