U.S., Vietnam: Trade Ties and a China Buffer

The United States and Vietnam signed a trade and investment framework agreement (TIFA) June 21 ahead of a June 22 meeting between Vietnamese President Nguyen Minh Triet and U.S. President George W. Bush. By warming up its trade relationship with Vietnam, the United States is facilitating an alternative for U.S. investors and businesses that want to set up production operations outside China. It also will allow the United States to apply further pressure on the Chinese regarding trade issues and currency reform, while lessening the potential negative impacts such pressure will have on U.S. businesses.