Why Vietnam will not balance against China
Vietnam is different from the rest of Asia in that it does not depend on the U.S. for security and China for trade. In fact, the opposite is true.
The United States and Vietnam celebrated the 30th anniversary of normalization of diplomatic relations on July 11. Unlike the fanfare of the 20th anniversary in 2015, when the U.S. broke its diplomatic protocol by hosting Nguyen Phu Trong, the former general secretary of the Communist Party of Vietnam (CPV), in the Oval Office, this year’s anniversary is overshadowed by bilateral trade tension. The Trump administration’s 20 percent tariff on Vietnamese exports and 40 percent tariff on transshipped goods from third countries, though lower than other Asian countries, has the potential to damage Vietnam’s trade relations with its biggest trade partner China.
The Trump administration did not hide the geopolitical intention behind the tariffs, intending them to isolate China, even though research has shown that Vietnam is not a Chinese backdoor. Vietnam has therefore not confirmed the 20 percent tariffs in its official statements and is expecting the number to be even lower. Prime Minister Pham Minh Chinh also met his Chinese counterpart Li Qiang on the sidelines of the BRICS summit, a few days after Trump’s 20 percent tariff announcement in July. Both countries agreed to boost trade ties in response to Trump’s tariffs.
Trump’s use of trade to pressure Vietnam to balance against China is built on a faulty premise. The U.S. thinks that if it pushes Vietnam hard enough with both sticks and carrots, coupled with Vietnam’s own maritime disputes with China, Vietnam will drop its multilateral foreign policy in service of Washington’s anti-China objectives in the Indo-Pacific. This is a superficial understanding of Vietnam’s security thinking. Hanoi will always prioritize security over its economy, and with the maritime disputes with China frozen to Hanoi’s benefit, Vietnam will not join any U.S.-led balancing coalition against China no matter how hard Washington pushes it on the trade front.
Washington is overestimating not just its trade leverage but also its military leverage vis-à-vis Hanoi. This also is based on the wrong impression that Vietnam, like other Asian countries, depends on China for trade and the U.S. for security. The thinking goes that if the U.S. can provide Hanoi with enough ships or fighters and take Hanoi’s side in the South China Sea disputes, Hanoi will feel confident enough to side with Washington against Beijing. This misperception is so prevalent that the New York Times characterized Vietnam as a U.S.-friendly country “working to counteract China” in 2018. Another survey also claimed that Vietnam has slowly moved away from China and toward the U.S. over the past 30 years.
Vietnam is different from the rest of Asia because it does not depend on the U.S. for security and China for trade. In fact, it is the opposite. Vietnam depends on the U.S. for trade and China for security. Vietnam’s exports to the U.S. account for 30 percent of the country’s GDP of $468 billion, roughly $70 billion more than its exports to China. Vietnam’s trade surplus with Washington largely offsets its trade deficit with China. Compared to other Asian countries, Vietnam is especially trade dependent, with its total exports accounting for 87 percent of GDP in 2023. Vietnam’s trade surplus with the U.S. is even higher than those of other U.S. allies such as Japan or South Korea, and Trump’s tariffs could decrease Vietnam’s GDP between 1 and 5.5 percent, per various forecasts.
Access to the U.S. market is highly important to Vietnam’s economic growth. Hanoi agreed to leapfrog its partnership with the U.S. from a Comprehensive Partnership to a Comprehensive Strategic Partnership with a hope of Washington granting Hanoi market economy status in exchange. Vietnam stuck to this demand when it was negotiating to lower the tariff with the Trump administration. Vietnam is also the second country after the United Kingdom that Trump announced reaching a trade agreement with. Vietnam depends on the U.S. market so much that diversifying away from the market will require an overhaul of the country’s foreign trade relations as well as domestic restructuring. For example, Vietnam cannot sell to China, its largest trading partner, what it sells to the U.S. As such, Vietnam wants Trump’s tariffs to be no more than 10 percent higher than those imposed on its regional competitors.
The story is different on the security front. Vietnam heavily depends on China for its security. This is not to be confused with an alliance relationship, in which Vietnam needs China’s assistance against a particular threat. Security dependence in this context means that China can militarily hurt Vietnam on both the continental and the maritime domains while Vietnam cannot hurt China in return because of Vietnam’s limited resources and weapons inferiority vis-à-vis China. This is logically similar to how the U.S. can coerce Vietnam by using tariffs while Vietnam cannot retaliate due to its minuscule volume of U.S. imports (just $13.1 billion in 2024) and the small scale of its economy compared to that of the U.S.
Whether Vietnam can economically develop in a peaceful environment is up to China. Vietnam was on the brink of economic bankruptcy when it tried to arms race against China between 1978 and 1991. Only after China ended its “bleeding Vietnam strategy,” normalized ties with Vietnam, and settled the land border and Gulf of Tonkin disputes in the 1990s and 2000, could Vietnam decrease its military spending in service of domestic economic development. It is not a coincidence that Vietnam always affirms its pledge not to host foreign military bases on its soil and not to join any alliances against China in high-level exchanges with China to assure China of Vietnam’s peaceful intentions. Avoiding a second Chinese invasion has been at the center of Vietnam’s defense policy since 1991. Even in the absence of such an invasion, Vietnam cannot and should not seek to arms race with China as a deterrent. Also, maintaining amicable Vietnam-China ties matters to Vietnam’s own relations with its neighbors Laos and Cambodia, as Vietnam must convince China that it has no intention of turning Laos and Cambodia against China.
China’s importance in Vietnam’s security thinking thus dwarfs that of the United States. The U.S. cannot protect Vietnam from a second Chinese invasion because Washington’s ability to project power onto continental Asia is limited. During the Cold War, the U.S. military could not defeat an inferior Chinese army in Korea and Indochina. Vietnam is also seeing the limits of the U.S. political will and military power in Ukraine in real time. Vietnam thus has not made any major arms purchases from the U.S. despite the lifting of the embargo on lethal arms in 2016, because it does not trust the U.S. as a security partner and worries that those purchases could invite unnecessary Chinese retaliation. The State Department’s decision to lay off 1,300 employees and Washington’s distraction by the conflict in the Middle East should caution Hanoi about the degree of attention the U.S. can really pay to the Indo-Pacific despite Washington claiming that the region is the “priority theater.” Hanoi also sees that not siding with the Washington has allowed it to expand its maritime holdings at a faster pace than the Philippines can. In short, so long as Vietnam remains on good terms with China, it does not need the U.S. security protection. Not being a U.S. ally frees Vietnam of any responsibilities to contribute to contingencies in Korea or Taiwan.
Vietnam does not want a U.S.-China war, whether a trade or a hot one. What Hanoi wants is a continuation of the status quo: to preserve a peaceful relationship with China to avoid war and to maintain access to the U.S. market to obtain foreign currency for economic growth. Assuming that Vietnam needs the U.S. for security like other Asian countries is a faulty premise, and developments in U.S.-Vietnam defense ties might be misconstrued as directed against China. Vietnam may purchase U.S. arms to offset the trade imbalance, but these measures should be seen in the context of trade alone because no matter how much Vietnam buys from the U.S., it will always be outgunned by China. A few F-16s or U.S. cutters cannot overturn the Vietnam-China power imbalance, as even the U.S. itself cannot arms race with China in the South China Sea. Vietnam will not balance against China simply because it tried and failed to do this the past.
If the U.S. pushes Vietnam too hard over the trade deficit will only damage bilateral trust and elevate China’s already dominant position in Vietnam’s security thinking. If China decides to buy more of Vietnam’s exports out of a geopolitical motive, the U.S. will lose its trade leverage over Hanoi. And because security always trumps the economy, Vietnam will not join a U.S.-led anti-China coalition, and the U.S. should stop thinking otherwise.
By Khang Vu – The Diplomat – July 16, 2025