Vietnam and the EU Upgrade Comprehensive Strategic Partnership: Geoeconomic Choices Amid Global Trade Changes

On December 5, in Hanoi, the capital of Vietnam, European Council President Antonio Costa and Vietnamese President Liang Qiang jointly announced the elevation of bilateral relations to a comprehensive strategic partnership. This represents the highest level of Vietnam's foreign relations, previously granted only to a few countries such as the United States, China, and Russia. This move occurred just two days after India and the European Union reached a free trade agreement and less than a week after the re-election of Nguyen Phu Trong, General Secretary of the Communist Party of Vietnam. Data shows that in the first 11 months of 2025, bilateral trade between Vietnam and the European Union exceeded 66.8 billion US dollars, a year-on-year increase of 6.6%. Against the backdrop of global trade rules being severely impacted and supply chains undergoing accelerated restructuring, the signing of this agreement is far more than a diplomatic statement. It reflects the deep strategic calculations behind the mutual alignment between Southeast Asia's manufacturing hub and the European economic bloc in turbulent times.

The timing of the agreement's signing and the geo-economic context

Analyze this agreement, which must be placed under the specific global trade pressures of early 2025. U.S. President Trump's tariff policies have substantially disrupted global finance and trade flows, forcing economies to recalibrate their partnerships. Before the agreement was signed, EU Ambassador to Vietnam, Julian Guerrier, frankly told the media that the geopolitical situation is quite severe. This severity is directly reflected in actions: Costa's visit to Hanoi followed immediately after his trip to India, and the EU-India free trade agreement, negotiated over nearly two decades, was just reached on December 3. Within a week, high-level EU diplomacy focused on Asia, with a tight schedule and clear objectives.

For Vietnam, the timing is equally delicate. When the agreement was announced, General Secretary of the Communist Party of Vietnam Nguyen Phu Trong had just secured re-election at the party congress, with his vision of driving economic growth through radical reforms receiving party endorsement. Choosing to elevate relations with the EU as the diplomatic debut of his new term sends a strong signal. The Vietnamese government has set a goal to become a high-income country by 2045, and achieving this vision requires sustained double-digit trade growth. Currently, Vietnam has signed 17 trade agreements, and its economy is highly dependent on trade. However, its substantial and persistent trade surplus—particularly with the United States, which accounts for about 30% of Vietnam's exports—is attracting increasing criticism. Tariff pressures and market access concerns from Washington are real risks. Hanoi needs to find more stable and diversified export markets for its electronics, apparel, and consumer goods to balance the vulnerability caused by over-reliance on a single market.

The Substantive Connotation and Level Advancement of the Comprehensive Strategic Partnership.

Comprehensive Strategic Partnership holds specific weight in Vietnam's diplomatic lexicon. It signifies an expansion of cooperation from traditional economic, trade, and investment areas to strategic fields such as security, defense, green energy, advanced technology, and personnel skills training. According to information on the Vietnamese government website, the two sides have previously established a defense and security dialogue mechanism. In a signed article published in the media, Costa pointed out that upgrading the relationship will provide a stronger platform to deepen cooperation in the most crucial areas: green energy, advanced technology, skills, and security. This positioning transcends a simple buyer-seller relationship, pointing towards deep industrial chain integration and long-term rule coordination.

From a data perspective, the economic ties between the two sides already have a solid foundation. The EU is Vietnam's fourth-largest trading partner, third-largest export market, and fifth-largest source of imports. Vietnam, in turn, is the EU's largest trading partner in Southeast Asia. The EU-Vietnam Free Trade Agreement (EVFTA), which took effect in 2020, has been a key catalyst. This agreement eliminates nearly 99% of tariffs and, according to Costa, has boosted bilateral trade by approximately 40%. As of 2025, the EU's stock of foreign direct investment in Vietnam stands at around 30 billion USD, ranking it among Vietnam's top ten sources of foreign investment. This upgrade in relations further lays a multidimensional network covering political mutual trust, security cooperation, and standards alignment on the high-speed highway built by the EVFTA.

It is particularly important that the European Union has thereby become the first entity in the ASEAN region to establish such a partnership with Vietnam. This provides Brussels with a high-quality pivot for advancing its Indo-Pacific strategy. Among the Global South countries, Vietnam is highly favored for its economic vitality, political stability, and strategic location. For the European Union, standing alongside such a reliable and predictable partner, as Costa stated, is a declaration of stance at a time when the rules-based international order faces multiple threats.

Supply Chain Restructuring and the Deepening of Vietnam's "China+" Role

Vietnam's economic rise over the past decade is closely linked to the global supply chain's shift away from China. To mitigate risks and reduce costs, multinational companies have relocated production capacities in electronics, textiles, consumer goods, and other sectors to Vietnam, making it a primary beneficiary of the "China+1" strategy. According to data from Vietnam's General Statistics Office, manufacturing now accounts for over one-quarter of its GDP, with international giants such as Samsung, Intel, and LG establishing major production bases in the country.

However, this undertaking is not without its challenges. Vietnam's supply chain still heavily relies on intermediate goods and raw materials imported from China, and its industrial upgrading faces bottlenecks in infrastructure, labor skills, and domestic innovation capabilities. The EU's comprehensive strategic partnership offers a potential pathway to overcome these bottlenecks. The focus on advanced technology and skills training in the cooperation directly addresses the core needs for Vietnam's manufacturing value chain to ascend. EU enterprises bring not only capital but also technical standards, management expertise, and green transition solutions.

For the EU, approaching one of Asia's fastest-growing manufacturing hubs holds dual strategic significance. On one hand, it is part of the effort to diversify supply chains, reducing excessive reliance on any single region for critical supplies and consumer goods. On the other hand, the EU's internal market has substantial demand for green and digital products. If Vietnam, as a production base, can upgrade according to EU standards, it will become a trusted overseas extension of capacity for achieving the EU's Green Deal and Digital Decade goals. This represents an investment based on long-term supply chain resilience, rather than merely cost-driven capacity outsourcing.

Multilateral Game in the Global Landscape and Vietnam's Balancing Act

Elevating the EU to a partnership level equivalent to that of China, the US, and Russia is another demonstration of Vietnam's bamboo diplomacy, which combines flexibility with principle. To date, Vietnam has established comprehensive strategic partnerships or similar high-level relationships with multiple major powers, including the United States, China, Japan, India, the United Kingdom, France, and Australia. This strategy of multi-directional alignment rather than taking sides has enabled it to maintain considerable room for maneuver and bargaining power amid great power competition.

Currently, the United States is reshaping trade relations through tariffs and friend-shoring policies, while China is deepening regional integration via the Belt and Road Initiative and the Regional Comprehensive Economic Partnership (RCEP). Caught in between, middle powers and hub economies, such as Vietnam, find their optimal strategy to be maintaining close yet distinct connections with all parties. Upgrading relations with the European Union can be seen as Vietnam strengthening its ties with the Western pole to balance its inevitable deep integration with China, both geographically and economically. This is not about distancing from China—China remains Vietnam's largest trading partner and a crucial neighbor—but rather about diversifying and securing its strategic options.

From the perspective of the European Union, the rapprochement with Vietnam also reflects its pursuit of strategic autonomy. Against the backdrop of friction in transatlantic relations due to trade policies and increasing uncertainty in the global order, the EU needs to demonstrate its ability to independently build and maintain key economic and security partnership networks. Rapidly advancing relations with democratic or reform-oriented economies such as India and Vietnam serves both as a means to hedge against fluctuations in traditional alliance relationships and as a way to showcase its geopolitical agency to domestic constituencies. Costa's emphasis on choosing long-term cooperation over short-term hedging highlights the EU's intention to move beyond transactional diplomacy and build structural partnerships.

The handshake between Hanoi and Brussels is a strategically calculated convergence. It occurs at a moment when the fractures in globalization are clearly visible, and nations are rewriting the scripts of economic cooperation. An annual trade volume of 66.8 billion USD and an investment stock of 30 billion USD represent its present, while blueprints for cooperation in areas such as green energy, semiconductors, and cybersecurity point toward the future. For Vietnam, this is another cornerstone on the path to its goal of becoming a high-income country by 2045; for the European Union, it is a significant move on the Indo-Pacific chessboard. As the shadow of tariffs looms over the globe, those nations capable of swiftly weaving new networks of relations and transforming economic complementarity into strategic stability may secure a more advantageous position amidst the shifting landscape. This comprehensive strategic partnership agreement is precisely the product of such efforts. Its subsequent implementation, particularly progress in integrating defense security and high-tech standards, warrants ongoing observation.