VIETNAM and the European Union upgraded their relations today to a comprehensive strategic partnership, Hanoi’s highest diplomatic level, as both recalibrate trade amid disruptions to global finance caused by US President Donald Trump’s tariff wars.

The upgrade places the EU on the same diplomatic footing as the United States, China and Russia and was announced during a visit to Hanoi by European Council president Antonio Costa.

“At a moment when the international rules-based order is under threat from multiple sides, we need to stand side by side as reliable and predictable partners,” he said.

Mr Costa arrived in Hanoi after India and the European Union had reached a free trade agreement on Tuesday following nearly two decades of negotiation.

Vietnamese President Luong Cuong described the move as a “historic milestone.”

Vietnam has been a major beneficiary of globalisation, emerging as a key manufacturing and export hub for electronics, garments and consumer goods as transnational firms shift production away from China as wages there have risen.

That export-led growth has helped boost incomes and transform the economy, but Vietnam’s large and persistent trade surplus has drawn criticism, particularly from the US and increasingly from Europe, where officials have raised concerns about market access.

Bilateral trade in the first 11 months of 2025 reached more than $66.8 billion (£48.3bn), up by 6.6 per cent from a year earlier.

The EU is Vietnam’s fourth-largest trading partner, third-largest export market and fifth-largest import source, while the country is the EU’s biggest trading partner in south-east Asia.

Vietnam hopes to become a rich nation by 2045 and is seeking new markets to reduce reliance on the US, its largest export destination, which takes about 30 per cent of the goods its sends abroad.