US to focus on deepening ties with Vietnam after Putin's Hanoi visit

FILE PHOTO: Russia's President Putin visits Vietnam

By David Brunnstrom and Jasper Ward

WASHINGTON (Reuters) -The U.S. responded to Russian President Vladimir Putin's visit to Vietnam on Thursday by saying Washington would stay focused on deepening ties with Hanoi, with which it has sought strong relations to counter rivalry with China.

A day after signing a mutual defense agreement with North Korea, Putin received a 21-gun salute at a military ceremony in Vietnam and said in Hanoi he wanted to build a "reliable security architecture" in the region.

Hours later, Washington announced that its top diplomat for East Asia, Daniel Kritenbrink, would visit Vietnam on Friday and Saturday to stress Washington's commitment to working with Hanoi to ensure a "free and open" Indo-Pacific region.

Putin's two-nation trip to Asia has been seen as a show of defiance to the West, and Vietnam's hosting him had been sharply criticized by Washington, which said the Russian leader should not be given a stage on which to defend the war in Ukraine.

The White House national security spokesperson John Kirby was asked at a regular briefing if the U.S. believed Putin would seek support for the Ukraine war from Vietnam and said Washington expected Hanoi would continue to adhere to U.N. principles on respect for territorial integrity.

Kirby stressed the U.S. upgrade of relations with Vietnam last year, and added: "We're going to stay focused on continuing to deepen it, broaden it, improve it for own mutual benefits to each other and to the region."

The U.S. is now Vietnam's top export market and the U.S. State Department said in announcing Kritenbrink's visit that he would "reaffirm the United States’ support for a strong, independent, resilient, and prosperous Vietnam" and "underscore the strong U.S. commitment to implementing the U.S.-Vietnam Comprehensive Strategic Partnership."

Russia and Vietnam signed agreements on issues including energy, underlining Moscow's pivot to Asia after the West imposed sanctions on Russia over the Ukraine conflict.

Despite U.S. concern over Vietnam hosting Putin, some analysts believe Hanoi may have calculated it will not suffer material consequences, given that Washington relies on good relations with Vietnam to counter its rivalry with China in the Indo-Pacific region.

However, Hanoi is awaiting an important U.S. decision due by July 26, on whether to elevate Vietnam to market-economy status, and Alexander Vuving, a Vietnam and Asia expert at Hawaii's Daniel K. Inouye Asia-Pacific Center for Security Studies, said hosting Putin could affect this.

"I think the Putin visit makes Vietnam less trustful in the eyes of the U.S., and may negatively affect the U.S. decision," he said.

The upgrade Hanoi seeks is opposed by U.S. steelmakers, Gulf Coast shrimpers and honey farmers, but backed by retailers and some other business groups. It would reduce punitive anti-dumping duties set on Vietnamese imports given its current status as a non-market economy marked by heavy state influence.

Speaking to reporters on Thursday, U.S. Treasury Secretary Janet Yellen did not reply when asked if Vietnam's closer ties with Moscow would affect the upcoming U.S. Commerce Department decision.

She said Washington saw Vietnam as a partner in efforts to diversify supply chains and reduce reliance on China. She added the upgraded partnership did not require Vietnam to sever ties with Russia or China and that Hanoi has a policy of working with many countries.

The Treasury on Thursday kept Vietnam on its monitoring list for currency practices, but said it was satisfied with progress made by the country and would stay in close touch with its central bank.

In its semi-annual report on foreign exchange markets, Treasury said Vietnam's net purchases of foreign exchange in the four quarters through December 2023 were $7 billion or 1.5% of GDP, below a 2% Treasury threshold for manipulation. It said Vietnam did not intervene persistently throughout the year to support its currency and made only moderate purchases of foreign exchange despite significant depreciation pressure on the dong.

Treasury said Vietnam's bilateral goods and services trade surplus with the United States reached $103 billion in the reporting period, the third largest surplus.

(Reporting by Jasper Ward, Kat Jackson, Doina Chiacu and David Brunnstrom; addtional reporting by Andrea Shalal and David Lawder in Washington and Rich McKay in Atlanta; Editing by Rod Nickel, Chizu Nomiyama and David Gregorio)