South-east Asia and America under Trump

US-Vietnam: Blow to economy and security

The election of Donald Trump as America's next president has introduced uncertainty into ties between the world's superpower and other countries. Five scholars at the ISEAS -Yusof Ishak Institute evaluate the likely impact on key nations in South-east Asia.

Mr Donald Trump's rise is consequential for Vietnam in two main aspects. Economically, if he sticks to the protectionist rhetoric espoused during the presidential election campaign, Vietnam will be hit hard. The United States is Vietnam's largest export market, accounting for more than 20 per cent of its annual export turnover.

While on the election campaign trail, Mr Trump had accused Vietnam and some other countries of "stealing" American jobs. Should he raise tariffs to block imports from Vietnam, as he said he would do to Chinese goods, Vietnamese businesses, both domestic and foreign-invested, will face major losses.

Even if Mr Trump leaves the tariff rates untouched, he may have already caused irreparable damage to Vietnam through his vehement objection to the Trans-Pacific Partnership (TPP), with Vietnam projected to be the biggest beneficiary in the 12-member grouping. As Vietnam's private and state-owned enterprises are underperforming, it seeks to boost exports and inward foreign investments to propel the economy. With the TPP stalled, Hanoi will need to look elsewhere to overcome its economic woes.

Strategically, if Mr Trump follows through on the isolationist foreign policy that he announced during his election campaign, the US rebalancing to Asia may be thrown into reverse, and US-Vietnam relations may take a back seat during his presidency.

This being so, Vietnam will lose an important diplomatic and strategic tool to handle China's assertiveness in the South China Sea. Washington's inward posture will also hurt Vietnam's overall foreign policy strategy, which takes the US-led regional security architecture as its default "operating system".

Vietnam's leaders have extended an invitation to Mr Trump to visit Vietnam during the Apec Summit in Hanoi next year. Still, it would be wise and prudent for Vietnam to prepare itself for the worst-case scenario in which Washington's relationship with Hanoi will lose its current momentum. Under this scenario, Vietnam will need to turn to other economic and strategic partners, such as Asean, Japan, India and the European Union, to compensate for its weakened ties with the US. At the same time, Hanoi may also need to consider a more accommodative stance on its South China Sea disputes with Beijing, especially if Mr Trump strikes a "deal" with China over its territorial and maritime claims.

  • The writer is fellow at ISEAS - Yusof Ishak Institute.

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A version of this article appeared in the print edition of The Straits Times on November 23, 2016, with the headline US-Vietnam: Blow to economy and security. Subscribe