Europe prepares charm offensive in Vietnam amid US trade risks

By Francesco Guarascio

HANOI (Reuters) - European leaders are planning visits to Vietnam in coming months to strengthen ties with the Southeast Asian nation, officials said, amid tensions with Washington that could impact their exports to the United States.

Former U.S. President Joe Biden pushed hard to boost U.S. influence in the former foe, considering the country a key partner in his strategy to contain China, but bilateral relations may weaken if his successor Donald Trump imposes duties on Hanoi, which is a potential target of his threatened reciprocal tariffs due to its large trade surplus.

Amid this growing uncertainty, European countries are intensifying their contacts with Vietnam, with the head of the European Commission Ursula von der Leyen and France's President Emmanuel Macron both planning visits in the next months, European officials and diplomats said, noting the trips have long been planned and are not yet finalised.

"The tide of tariffs and export controls is rising...We want to create new opportunities to trade and invest with trusted partners," von der Leyen told top officials from Southeast Asian bloc ASEAN in a video message when they were gathered last week in Vietnam's capital Hanoi.

Macron could travel to Vietnam in late May, with the aim of further boosting ties with the former colony after Paris formally elevated diplomatic relations last year, while von der Leyen could visit earlier with the goal of formally upgrading ties, a senior EU official said, adding EU trade commissioner Maros Sefcovic may precede them in April.

Macron's office declined to comment. A spokesman for the European Commission could not confirm any official visit at this stage. Vietnam's foreign ministry did not reply to requests for comment.

FROM RAILWAYS TO AID

The EU imported $52 billion worth of goods from Vietnam last year, less than half of U.S. imports but still Vietnam's third export market thanks also to an existing free trade deal.

U.S. manufacturers in Vietnam, whose business relies on exports to the U.S. more than their European rivals, expect cuts in their workforce if Trump imposes tariffs, a survey found.

That scenario, despite being the result of what the EU official described as a "catastrophic" shift in global trade, could however lead to more Vietnamese exports to the EU and may in turn facilitate investments in Vietnam by European companies, as they might access redundant talent more easily, he said.

That comes as Vietnam wants to diversify military supplies and boost public spending on infrastructure, including a major railway project, with European companies racing to win contracts.

On development policy, Europe is already working to take on the U.S. mantle after Trump froze foreign aid.

Belgium is setting up a fund that would contribute to restart the temporarily suspended recovery of areas contaminated with agent orange sprayed by U.S. forces during the Vietnam War, the country's ambassador to Vietnam Karl Van den Bossche said, noting the plan was to turn the reclaimed land into profitable industrial zones.

(Reporting by Francesco Guarascio in Hanoi; additional reporting by Elizabeth Pineau in Paris and Khanh Vu in Hanoi.)