Trump’s Diplomatic Pivot to Narrow the U.S.-Vietnam Trade Gap

The Trump administration is signaling a significant shift in its diplomatic and economic approach toward Vietnam, marked by the recall of Ambassador Marc Knapper and the nomination of Jennifer Wicks McNamara. While Knapper was known for fostering closer bilateral ties and maintaining optimism regarding trade negotiations, his successor appears poised to take a more assertive stance on the growing economic divide between the two nations. During her confirmation process, Wicks McNamara explicitly identified the current trade relationship as "imbalanced," emphasizing her intent to secure better market access for American products and to push for more Vietnamese investment within the United States.

This diplomatic transition comes at a time when Vietnam’s economic footprint in the U.S. has reached historic levels. Recent data reveals that Vietnam’s trade surplus in goods has not only broken previous records but has also surpassed China’s surplus in specific recent quarters. While China still maintains a larger cumulative surplus for the year, the rapid rise of Vietnam—second only to Mexico in the scale of its trade gap with the U.S.—has drawn intense scrutiny from Washington. This surge is partly attributed to the decline in direct U.S.-China trade, as Vietnam increasingly becomes a primary manufacturing alternative.

However, this growth has brought Vietnam into the crosshairs of U.S. trade enforcement. The White House has raised concerns that Vietnam may be serving as a transit point for Chinese goods attempting to bypass higher duties through "Made in Vietnam" labeling. Although the U.S. has already imposed 20% tariffs on various imports, analysts suggest that Hanoi remains economically vulnerable. Even as the Supreme Court reviews the legality of certain trade actions, the administration maintains several legislative and executive avenues to further escalate tariff rates.

Beyond trade, Wicks McNamara intends to maintain the long-standing focus on deepening security cooperation, a priority shared by her predecessor. Nevertheless, the immediate focus remains the $144.2 billion surplus recorded in the first ten months of the year. As the U.S. continues to investigate claims of illegal transshipment from China through Vietnamese ports, the incoming envoy’s primary challenge will be balancing security interests with a mandate to aggressively narrow the trade deficit.