New ambassador nominee targets imbalance as Vietnam becomes Washington’s top goods surplus partner
MARKET INSIDER – Vietnam has quietly moved to the center of America’s trade wars—and Washington has noticed. As Hanoi’s goods trade surplus with the United States surged past China’s in recent quarters, President Donald Trump’s administration is reshaping its diplomatic posture, nominating a new U.S. ambassador to Vietnam with a clear mandate: rebalance trade, fast.
The abrupt recall of current ambassador Marc Knapper before Christmas marks a turning point. His successor-designate, veteran diplomat Jennifer Wicks McNamara, has been explicit with lawmakers that the U.S.–Vietnam trade relationship is “imbalanced”—language that signals tougher scrutiny at a moment when global supply chains are already under strain.
Vietnam’s export engine has been firing on all cylinders. Despite U.S. tariffs of up to 20% imposed since August, Hanoi recorded nearly $134 billion in goods trade surplus with Washington last year, based on Vietnamese government figures. Seasonally adjusted U.S. data show the surplus climbing even higher—$144.2 billion from January to October—already exceeding Vietnam’s full-year record. More strikingly, Vietnam’s quarterly surplus overtook China’s in the second and third quarters of 2025, trailing only Mexico among U.S. trade partners.
This shift reflects a broader geopolitical realignment. As U.S.–China trade cooled sharply, China’s surplus with the U.S. nearly halved year-on-year in the third quarter, while Vietnam’s jumped more than 40% over the same period. Multinationals diversifying away from China have poured production into Vietnam, turning it into a manufacturing hub for electronics, apparel, and furniture bound for American consumers.
But success has brought vulnerability. Economists warn that Vietnam is now squarely in Washington’s sights. “The administration still has multiple avenues to re-escalate tariff rates,” said Adam Samdin of Oxford Economics, noting that Vietnam’s ballooning surplus leaves it exposed regardless of pending U.S. Supreme Court rulings on tariff legality.
Adding to the pressure are long-standing U.S. accusations that Vietnam serves as a transshipment route for Chinese goods seeking to evade higher U.S. duties. While illegally transshipped products face tariffs of up to 40%, Washington has yet to clarify how such cases will be determined. According to Phan Xuan Dung of the ISEAS–Yusof Ishak Institute, scrutiny on this issue is likely to intensify under the new ambassador.
For global investors and supply-chain strategists, the message is clear: Vietnam’s rise as a China alternative has reached a critical inflection point. The next phase will not be defined by export growth alone, but by Hanoi’s ability to open its market further, police its trade lanes, and rebalance capital flows toward U.S. investment.
Whether this recalibration strengthens Vietnam’s role in the global economy—or exposes new fault lines in the post-China supply chain—will shape trade politics well beyond Southeast Asia.
