After a 20-year hiatus of severed ties, President Clinton announced the formal normalization of diplomatic relations with Vietnam on July 11, 1995. Subsequent to President Clinton's normalization announcement, in August 1995, both nations upgraded their Liaison Offices opened during January 1995 to Embassy status. As diplomatic ties between the nations grew, the United States opened a Consulate General in Ho Chi Minh City and Vietnam opened a Consulate in San Francisco.

U.S. relations with Vietnam have become deeper and more diverse in the years since political normalization. The two countries have broadened their political exchanges through annual dialogues on human rights and regional security. They signed a Bilateral Trade Agreement in July 2000, and are actively pursuing agreements in other areas. A cornerstone of relationship remains; cooperation on the issue of Americans missing from the war in Vietnam. As of September 2000, 2,005 Americans who were killed in action with bodies not recovered (KIA/BNR) remain unaccounted for in Southeast Asia, 1,506 in Vietnam. The U.S. Government is actively pursuing 1,363 missing Americans in Southeast Asia, including 913 in Vietnam. Since 1973, 578 Americans have been accounted for, including 412 in Vietnam. Since January 1993, the remains of 258 individuals have been repatriated and identified and returned to their families, 140 in Vietnam. Additionally, the Department of Defense has confirmed the fate of all but 41 of 196 individuals who fall under the "Last Known Alive" (LKA) priority discrepancy cases in Vietnam. The United States considers achieving the fullest possible accounting of Americans missing and unaccounted for in Indochina to be its highest priority with Vietnam.

Reflecting the growing diplomatic relations between the two nations, economic relations between the United States and Vietnam have changed dramatically over the past decade. In July 1993, subsequent to the opening of the U.S. repatriation office in Ho Chi Minh City, the U.S. dropped its objections to bilateral and multilateral lending to Vietnam. In February 1994, following substantial Vietnamese cooperation on POW/MIA issues, President Clinton removed the long-standing trade embargo on Vietnam. In March 1998, President Clinton granted a Jackson-Vanik waiver to Vietnam, which he has renewed in 1999 and 2000 for one-year periods. (a Jackson-Vanik waiver is required along with U.S. Congressional approval of a bilateral trade agreement in order to grant Vietnam normal trading rights. This waiver must be renewed annually and is based on Vietnam's cooperation on emigration issues.) On July 13, 2000, the United States and Vietnam signed a Bilateral Trade Agreement which, following U.S. Congressional approval, will fundamentally change Vietnam's trade regime and help liberalize its economy.

Increased trade between the U.S. and Vietnam, combined with large-scale U.S. investment in Vietnam, evidence the maturing U.S.-Vietnam economic relationship. In 1999, Vietnam exported $655 million of goods to the U.S. and imported $291 million of U.S. goods. Similarly, U.S. interests continue to invest directly in the Vietnamese economy. During 1999, the U.S. private sector committed over $120 million to Vietnam, becoming the seventh-largest foreign investor in the country.