Obama announced the full removal of the embargo at a news conference where he vowed to leave behind the troubled history between the former war enemies and embrace a new era with a young, increasingly prosperous nation. Obama steered clear of harsh condemnation of what critics see as Vietnam's abysmal treatment of dissidents, describing instead modest progress on rights in the one-party state. Activists said his decision to lift the embargo destroyed the best U.S. leverage for pushing Vietnam on abuse.

"At this stage, both sides have established a level of trust and cooperation, including between our militaries, that is reflective of common interests and mutual respect," Obama said. "This change will ensure that Vietnam has access to the equipment it needs to defend itself and removes a lingering vestige of the Cold War."

Obama also has more current motivations. His move was the latest step in a yearslong and uneven effort to counter China's influence in Asia. Obama's push to deepen defense ties with a neighbor was certain to be eyed with suspicion in Beijing, which has bristled at U.S. engagement in the region and warned officials not to take sides in the heated territorial disputes in the South China Sea.

Vietnamese President Tran Dai Quang embraced the chance to enter a new era in U.S-Vietnamese relations. He praised the expansion in security and trade ties between "former enemies turned friends" and, standing next to Obama before reporters, called for more U.S. investment.