WASHINGTON – President Donald Trump will focus on U.S.’s trade deficit when he hosts Vietnam’s prime minister Wednesday, while the Southeast Asian country is still shaken by Trump’s withdrawal from a regional commerce pact.
Prime Minister Nguyen Xuan Phuc is the first leader to visit the Trump White House from Southeast Asia, where the U.S. vies with China for influence. Billions of dollars in U.S.-Vietnamese business deals are expected to be signed during his visit.
The Oval Office meeting could be overshadowed by indications Trump will pull the United States out of a global climate agreement that commits nations to reducing carbon emissions. The World Bank has ranked Vietnam, whose population mostly lives in coastal areas and low-lying deltas, as one of five countries most likely to be affected by climate change.
Trump is due to travel to Vietnam to attend an Asia-Pacific economic summit in November, but the relationship is on uncertain ground.
The U.S. and Vietnam only normalized ties in 1995, two decades after the Vietnam War’s end. Under President Barack Obama, diplomatic and security ties blossomed, as Vietnam sought ways to counter China’s island-building and vast claims to the disputed South China Sea.
Trade ties expanded also. Vietnam would have been a prime beneficiary of the 12-nation Trans-Pacific Partnership (TPP) agreement negotiated under Obama. In exchange for greater access to U.S. markets, Vietnam agreed to allow independent trade unions, a significant concession in its one-party state.
But within days of taking office, Trump withdrew the U.S. from the trade deal, saying it would hurt U.S. workers. While Vietnam has actively courted the new administration, the two sides must navigate Trump’s concern over the U.S. trade deficit with Vietnam, the U.S.’s sixth-largest.
At a gala dinner for Phuc hosted by the U.S. Chamber of Commerce late Tuesday, U.S. Trade Representative Robert Lighthizer said the annual trade deficit increased over the last decade to nearly $32 billion, from $7 billion, presenting “new challenges” for the relationship.
Phuc may have to demonstrate the benefits of trade. He told the chamber that deals for U.S. goods and services worth $15 billion to $17 billion would be signed during his visit. He gave no details. GE Power Chief Executive Officer Steve Bolze said the company would sign $6 billion in agreements.
During a visit to Vietnam last year, Obama lifted restrictions on U.S. arms sales to the communist-governed nation. That hasn’t led to purchases by Vietnam, although the U.S. recently delivered six coastal patrol boats to Vietnam’s coast guard in a sign of deepening security cooperation. Vietnam has also just received a Hamilton-class cutter decommissioned from the U.S. Coast Guard.
Last week, the U.S. Navy conducted its first freedom of navigation operation in the South China Sea since Trump took office, sailing close to a disputed island claimed by China. The operation would have been welcomed by Vietnam, one of several governments challenging China’s sweeping sovereignty claims.