The TOI correspondent from Washington: There is still hope yet for US-Iran ties.Some 50 years after the fall of Saigon, America’s former enemy has achieved a distinction that would have seemed like satire in the 60s and 70s. Vietnam has now run up the biggest trade surplus with the United States — $ 114 billion in just the first half of 2026 — ahead of giants such as China, Mexico, and Taiwan, according to the Wall Street Journal. In 2025, Vietnam ranked third after China ($ 202 billion and Mexico ($ 197 billion), but it is now on track to be the world’s top exporter to the US.It is a remarkable transformation for a country of 100 million people which was battered by the US and has long lived in the shadow of China’s 14x population and 40x economy ($20 trillion v $500 billion). Yet American imports from Vietnam ramped up 40% from a year earlier, while imports from China fell from $168 billion to $129 billion.The journey, according to trade experts, began not with tariffs but with pragmatism. Hanoi launched its Doi Moi economic reforms in the 1980s, abandoning Soviet-style central planning and opening itself to global commerce. Washington lifted its trade embargo in 1994 and normalized diplomatic relations in 1995. A bilateral trade agreement that took effect in 2001 then transformed the relationship. According to state department figures, two-way trade rose from just $451 million in 1995 to nearly $124 billion in 2023.Vietnam also did something that many developing countries promise but few accomplish: it made manufacturing for export the centerpiece of its economic strategy, joining regional trading arrangements, cultivating foreign investment, building industrial parks and ports, and offering multinational companies a young, relatively inexpensive workforce, all with a speed, focus, and discipline alien to India. The World Bank says Vietnam’s trade-to-GDP ratio is now nearly 170%, making it one of the world’s most trade-oriented economies.Much of this has been at the expense of Beijing. As Chinese wages rose and the US-China relationship deteriorated, multinational corporations adopted the now-famous “China plus one” strategy. Energetic Vietnam — and not slothful India — became the obvious plus one: geographically close to China’s manufacturing heartland, deeply integrated into Asian supply chains, cheaper, politically stable, and increasingly experienced in making the things Americans buy.Samsung, Intel, and Foxconn established substantial Vietnamese operations with Apple, Nike, and Lululemon following. The Journal reports that about 60% of Vietnamese exports to America are now machinery, electronics or appliances — hardly evidence of Chinese shirts merely being given Vietnamese name tags. A Miami furniture company, TOV Furniture, flipped its sourcing from 60% China/25% Vietnam in 2024 to 25% China/60% Vietnam today, explicitly because of tariffs.And herein lies the irony of the tariff strategy of a President who famously bailed out of the Vietnam War because of bone spurs. Trump wants tariffs to bring factories back to America to address its manufacturing achilles heel. Instead, some factories moved next door to China: China’s effective US tariff rate was 23.2% in June, compared with only 6.5% for Vietnam.Vietnam’s success also highlights New Delhi’s relatively disappointing performance. India has roughly 14 times Vietnam’s population, yet its goods trade surplus was only $58.4 billion. The comparison is striking: a country with barely one-fourteenth of India’s population is running a US trade surplus roughly twice as large.Of course, India and Vietnam have very different economic structures. India’s enormous domestic market and its strengths in services means that US goods-trade balances don’t capture the whole economic relationship. But clearly, Vietnam has been dramatically more successful than India at converting foreign investment and low-cost labor into export-oriented manufacturing and US-bound supply chains.Still, India is now making impressive gains in electronics – mobile-phone exports, for example, have risen sharply. But it has historically been less deeply embedded in manufacturing supply chains. The World Bank notes that India’s labor-force participation is just 56.4%, versus 73% in Vietnam, while 45% of Indian employment remains in agriculture (in Vietnam, it has dropped from 65 per cent in 2000 to 25 per cent in 2025). It specifically identifies infrastructure, labor-market rules, regulatory compliance and deeper participation in global value chains as areas requiring improvement.Vietnam therefore offers an intriguing lesson for US adversaries worthy of The Mouse That Roared, the 1959 film in which a tiny fictional country discovers that declaring war on America can be an excellent economic-development strategy. Vietnam has produced a more sophisticated sequel: survive the war imposed on you, make peace, join the global economy – and eventually export your way to prosperity.