Vietnam has emerged as a leading strategic hedger in a global order undergoing a major power transition. By engaging in repeated, diverse, and complementary actions with all major powers without forming formal alliances or restricting its options, the nation has successfully navigated severe geopolitical friction. This strategy was highlighted on May 29, 2026, when To Lam, General Secretary of the Central Committee of the Communist Party of Vietnam and President of Vietnam, delivered the Keynote Address at the 23rd IISS Shangri-La Dialogue, emphasizing the country's commitment to hedging amid global uncertainty.
This diplomatic approach faced a major challenge on April 2, 2025, when U.S. President Donald Trump targeted Vietnam with a punishing 46 percent tariff. Trump accused the country of collaborating with China on transshipment and treating the United States unfairly, drawing attention to a $123.5 billion U.S. trade deficit with Vietnam, which was the third largest after deficits with China and Mexico. Shortly after, on April 14-15, 2025, Chinese President Xi Jinping visited Hanoi to pressure Vietnamese leadership against conceding too much to the United States, placing Vietnam's role as a vital connector in global supply chains under immense strain.
Despite these competing pressures, the ongoing Iran war, and widespread trade tensions, Vietnam has thrived over the subsequent 16 months. Overall exports grew by 17 percent in 2025, with exports to the U.S. rising 28 percent to reach $153 billion. During the first seven months of 2026, U.S. imports from Vietnam reached $104.7 billion, representing a 23 percent year-on-year increase. Vietnam's GDP growth rate hit 8 percent in 2025 and reached 8.18 percent in the first half of 2026, far outperforming the International Monetary Fund's September 2025 Outlook prediction of 5.6 percent growth for 2025.
Three distinct advantages have allowed Vietnam to succeed in hedging and resist pressure from the United States, China, and Russia. First, its critical geopolitical position means no major power can allow another to dominate the country, forcing them to exhibit forbearance. Second, Vietnam has established structural indispensability in global supply chains as a primary destination for companies pursuing "China plus one" or out-of-China strategies. Finally, Vietnam has demonstrated tactical skill in managing individual great powers and their leaders.
To mitigate the impact of tariffs, Vietnam implemented supply chain adjustments and automation while actively signaling cooperation with Trump's economic priorities. In May 2025, the Ministry of Finance led the largest-ever Vietnamese corporate delegation to the Select USA fair in Maryland to secure corporate backing against further tariffs. That same month, from May 16-21, Vietnam fast-tracked a $1.5 billion real estate investment by the Trump Organization, with events attended by Eric Trump. Later, from February 18-20, 2026, Secretary General To Lam traveled to the United States to attend the opening ceremony of the Trump Board of Peace for Gaza and sign multiple cooperation agreements.
Vietnam has maintained a similar balance with China. Although Minister Vu Hai Quan led a delegation to the Shanghai World AI Conference, Vietnam refused to join the 29 founding members of the China-created World AI Cooperation Organization (WAICO), unlike regional neighbors Indonesia and Malaysia. This refusal allowed Vietnam to adhere to its hedging principles and avoid crossing a U.S. red line on artificial intelligence governance.
Simultaneously, Vietnam has broadened its diplomatic network. Over the past 18 months, the country upgraded and intensified its economic and political relations with Japan, India, South Korea, Australia, New Zealand, the United Kingdom, France, and the European Union. Since January 2025, Vietnam has deepened its existing strategic partnerships while adding six comprehensive strategic partners—comprising the U.K., the EU, Indonesia, New Zealand, Singapore, and Thailand—alongside nine new strategic partners and two new comprehensive partners.
