Description: Following the conclusion of the EU – India Free Trade Agreement, European Council President, Antonio Costa met with Vietnamese President, Luong Cuong in Hanoi where they agreed to reshape trade ties. Costa stated that volatile geoeconomic conditions have forced Europe to pursue alternative trade partners and strengthened and extend existing economic and strategic partnerships with reliable countries. Europe is Vietnam’s fourth largest trading partner, third largest export market and fifth larges import market while Vietnam is Europe’s largest trading partner in Southeast Asia. Bilateral trade between the EU and Vietnam during 2025 reached $66.8 billion, an increase of 6.6% compared to 2024.
Impact: The extension of trade ties with a key manufacturing hub in Asia, enables Europe to diversify its supply chain industry, establish a firm foothold in one of the leading Asian economies and further decrease reliance on the US and China. Vietnam benefits by reducing its dependence on the Chinese market, further expanding its access to a large European market and downsizing the effects of the US tariffs. Europe is expected to further construct trade and strategic ties with Asian countries outside of China, while Vietnam is aiming to establish itself as one of the more reliable trade partners in the region in order to support its economic growth ambitions and national progressive strategy.