Vietnam has emerged as a leading strategic hedger in a global order undergoing major power transition. In other words, it has engaged in “repeated, diverse, sustained, and complementary actions to engage with all major powers without reaching a formal alliance with any and without restrictions on possible actions with others.”

On April 2, 2025, Vietnam’s strategy faced a massive test: on so-called “Liberation Day,” U.S. President Donald Trump targeted Vietnam with a punishing 46 percent tariff, accusing the country of conniving with China on transshipment and treating the United States unfairly. Totaling $123.5 billion, the U.S. trade deficit with Vietnam was the third largest after its deficits with China and Mexico. It attracted attention. 

On April 14-15, Chinese President Xi Jinping was in Hanoi, pressuring Vietnam not to give in too much to the United States. With pressure from both sides, the future of Vietnam as a connector country in global supply chains was under great stress.

Fast forward 16 months, and Vietnam has not just survived in the disorder; it has thrived. 

Overall exports increased by 17 percent in 2025 overall (and exports to the U.S. increased 28 percent, to $153 billion). In the first seven months of 2026, the U.S. imported $104.7 billion worth of goods from Vietnam, a 23 percent year-on-year increase. Vietnam’s GDP growth rate reached 8 percent in 2025 and 8.18 percent in the first half of 2026, despite trade tensions and the Iran war, and in contrast to the prediction of 5.6 percent for 2025 made by the IMF Outlook in September 2025. 

To accomplish this economic feat, Vietnam did not throw its lot in with one great power or join an alliance. In fact, it doubled down in its strategic behavior as a hedger. Vietnam is deeply committed, for strategic and historic reasons, to respond to uncertainty and global geopolitical tensions by hedging.

Amazingly, it has worked so far. Vietnam seems particularly able to succeed in hedging and resist the formidable pressures of three great powers – not only China and the U.S., but Russia – due to three key advantages. First, Vietnam’s crucial geopolitical position means that no great power can let another dominate, forcing them to show some forbearance. 

Second, Vietnam has built a position of structural indispensability in supply chains as the recipient of investments linked to businesses’ “China plus one” or out-of-China strategy. For many Western firms, Vietnam is hard to replace. Vietnam has also started to diversify its markets. 

Third, Vietnam has shown tactical genius in handling each of the three great powers and their leaders.

With the United States, Vietnam negotiated intensely and directly, the day after the tariffs were announced. Getting ahead of ASEAN solidarity, it engaged intensely with Washington and on July 2, 2025, became the third country to reach a deal with the Trump administration, after the United Kingdom and China. The deal reduced U.S. tariffs to 20 percent (and 40 percent on transshipments, although the term is not well defined) and committed Vietnam to across-the-board opening to U.S. exports. These conditions were reconfirmed in a formal White House Fact Sheet in October. But, crucially, Vietnam refused to accept poison pill restrictions and commitments to follow U.S. sanctions on China, unlike Malaysia and Cambodia at the time. 

Even the lowered tariffs led to painful supply chain adjustments and automation, but Vietnam’s efforts mitigated the worst of the damage.

At the same time, Vietnam went out of its way to signal opening to Trump’s own priorities. In May 2025, the Ministry of Finance led the largest-ever Vietnamese corporate delegation to the Select USA fair in Maryland. They enlisted some U.S. corporate support in fending off further tariffs. The same month, on May 16-21, Vietnam fast-tracked a $1.5 billion real estate investment by the Trump Organization, with events attended by Eric Trump. 

On February 18-20, 2026, Secretary General of the Communist Party of Vietnam To Lam traveled to the United States to attend the opening ceremony of the Trump Board of Peace for Gaza and sign a flurry of cooperation agreements.

Yet, Vietnam would not cross certain boundaries with the U.S. Hanoi’s willingness to compromise did not prevent a strong push to resume the war legacy remediation program, which had been disrupted by the dismantlement of USAID. The United States gave in – Secretary of Defense Pete Hegseth came to Hanoi and committed another $130 million to the fund, but he could not persuade Vietnam to sign an arms deal. Vietnam also refused to take measures that would antagonize China or Russia and refused to join the Pax Silica initiative.

At the same time, Vietnam underwent intensified engagement with China. As mentioned earlier, Chinese leader Xi Jinping visited Hanoi in April 2025 and Vietnamese leader To Lam reciprocated with a visit to Beijing on April 14-17, 2026, leading to the conclusion of a joint statement and 32 cooperation agreements. Foreign ministers also visited each other, as well as Vietnam’s former prime minister and president. The increased cooperation resulted in new MOUs between Chinese and Vietnamese media that include content co-production terms and the promotion of people-to-people ties. In terms of sheer number of agreements, Vietnam signed more with China than the United States over the past year and half.

On AI governance, Minister Vu Hai Quan led a delegation to the Shanghai World AI Conference, but Vietnam refused to join the 29 founding members of the World AI Cooperation Organization (WAICO) created by China, unlike Indonesia and Malaysia. Here again, Vietnam kept to its hedging playbook, refusing to cross a U.S. red line.

Vietnam similarly intensified its long relationship with Russia. No fewer than seven Vietnamese leaders have visited Russia since January 2025, including top leader To Lam on May 9-12, 2025. During that visit, the two leaders signed a major joint statement that accelerated energy cooperation. In March 2026, Vietnam reached a nuclear deal with Rosatom to fast-track the building of one nuclear reactor in Khan Hoa province, leaving Japanese, French, Korean, and U.S. companies disappointed. Vietnam and Russia regularly discuss maritime issues, with General Phan Van Giang’s visit to Moscow in May 2025 offering Vietnam some support in the South China Sea.

Over the past 18 months, Vietnam also upgraded and intensified its relations and economic engagement with Japan, India, South Korea, Australia, New Zealand, the U.K., France, and the EU. In fact, since January 2025, Vietnam has deepened its strategic partnerships with existing partners, while adding six comprehensive strategic partners (the U.K., the EU, Indonesia, New Zealand, Singapore, and Thailand), nine new strategic partners, and two new comprehensive partners.

In sum, Vietnam has managed so far to do well in the midst of a trade war, geopolitical tensions, and global uncertainty, all through the mastery of the art of hedging. This art is a risky one over time, with countless necessary adjustments. The question remains whether Vietnam will manage to jump all the hoops ahead.