From a Trump golf course to a $10.9b Chinese railway, Vietnam finds a way through US-China tensions

HUNG YEN, Vietnam – There is a flurry of activity not quite seen before in this nondescript, hardscrabble village tucked inland along Vietnam’s winding Red River, its inhabitants descending from a long line of pomelo and longan growers.

Fish are being dredged out of breeding ponds. A tractor is busy clearing clay being stored on a plot of land belonging to the owner of the local brickworks.

Most notably, there are real estate deals waiting to be done, with asking prices soaring sixfold in the space of just a couple of months.

“This is 100 per cent Trump,” said one villager, matter-of-factly.

The return of US President Donald Trump to the White House, and his declared intention to reshape world trade in the mould of his America First agenda, has upended global financial markets and crimped economic growth forecasts.

Vietnam finds itself stuck squarely in the middle of US-China trade tensions, and is itself trying to negotiate down 46 per cent “reciprocal tariffs” imposed by the Trump administration. This was part of the wave of “Liberation Day” tariffs unleashed on the world’s exports on April 2, before Mr Trump announced a 90-day pause a week later for all countries except China.

Yet, for some villagers along the Red River in Hung Yen, the home province of Vietnamese Communist Party general secretary To Lam which borders the capital Hanoi, the Trump name represents a potential windfall of a lifetime.

The land surrounding their homes has been earmarked for development by none other than the Trump Organization, with local property developer KinhBac City.

Speeding up the development of the Trump Organization’s golf resort and real estate development in Hung Yen is a prime example of Vietnam’s multi-pronged, often out-of-the-box approach to challenges as it finds itself precariously sandwiched between the US and China and their resulting trade tensions. 

The joint venture, announced in October 2024 while Mr Trump was still on the presidential campaign trail, will build hotel and resort complexes, residential estates, a theme park and three 18-hole golf courses stretching across 9.9 sq km.

The proposal was formally approved by Deputy Prime Minister Tran Hong Ha, local media reported on May 16, with construction scheduled between the second quarter of 2025 and 2029.

Mr Trump turned over the management of the Trump Organization to his elder sons, Donald Jr and Eric, after he was first sworn in as president in January 2017.

“We are incredibly excited to enter this dynamic market,” Mr Eric Trump said in a statement announcing the venture at the time.

“Vietnam has tremendous potential for luxurious hospitality and entertainment.”

Things have moved quickly since villagers were first told in February that their area had been chosen for development.

After quick-fire consultations, district authorities moved to requisition vacant land for the project by April and have made clear, locals say, that the impetus has come from the central government for works to be expedited ahead of a ground-breaking ceremony.

In online group chats and real-world coffee houses alike, residents share detailed planning maps, local news reports, and trade gossip of varying veracity.

Villagers say they have been given assurances that their existing homes will not be forcibly acquired or demolished as a result of the project. And while the compensation the government is required to pay farmers for relinquishing unused land is modest, locals are buoyed by the surging resale value of their homes on the private market, fuelled by interest from prospective property speculators.

Diplomatic toolkit

The hive of activity in Hung Yen puts a different spin on Vietnamese Prime Minister Pham Minh Chinh’s remarks at an appearance at the World Economic Forum in January.

He said he would be willing to “golf all day” with Mr Trump if it would somehow benefit Vietnam, drawing laughter from the Davos crowd.

There is precedent, however: The late former Japanese prime minister Shinzo Abe appeared to share some bonhomie with Mr Trump over a mutual love of golf. And even if Mr Chinh’s comments were made in jest, they are nonetheless in keeping with Hanoi’s desire to build personal rapport with the American President, as well as a willingness to delve deep into its diplomatic toolkit in order to do so – stretching back to when Hanoi agreed to host Mr Trump’s 2019 summit with North Korean leader Kim Jong Un in the Vietnamese capital.

Vietnam has been among the most proactive countries in the world in engaging the Trump administration over tariffs – reflecting, perhaps, that it also has among the most to lose.

Vietnam had been one of the biggest winners of the first iteration of Mr Trump’s trade war that started in 2018 during his first term in office. Foreign multinationals seeking to derisk their global supply chains as part of a so-called “China Plus One” strategy flocked to Vietnam’s shores, while Chinese factories also saw the South-east Asian nation as a handy base from which to ship goods and avoid US tariffs.

But it was that success that saw Vietnam’s trade surplus with the US balloon, landing it in the cross hairs of the Trump administration.

Vietnam’s exports to the US grew to 30 per cent of its gross domestic product in 2024, with electronics (43 per cent) and textiles (24 per cent) the biggest contributors. Its trade surplus with the US is the third-largest in the world, behind only China and Mexico.

Hanoi has pledged to buy more goods from the US and lower its existing tariffs on American goods to zero to help narrow the trade gap.

It has also allowed Mr Elon Musk’s Starlink to sell its satellite internet services without requiring the company to enter a joint venture with a local partner as is usually required by the country’s strict laws on foreign ownership.

“Vietnam has really tried to reach out to the Trump administration, not only officially, but also through different channels,” said Ms Hoang Thi Ha, senior fellow and co-coordinator of the regional strategic and political studies programme at ISEAS – Yusof Ishak Institute in Singapore. “That may turn out to be more important than going through the official channels.”

Even before Mr Trump announced a “reciprocal” tariff rate of 46 per cent on Vietnamese goods, Hanoi had slashed its own import taxes on a range of products, including liquefied natural gas and vehicles, which came into effect on March 31. Mr Lam was among the first world leaders to speak with Mr Trump after the tariffs were announced on April 2.

In a nod to a key Trump administration concern regarding the rerouting of trade through Vietnam to skirt US tariffs, Hanoi has been consistent in assuring Washington that it would implement mechanisms to prevent trade fraud and illegal trans-shipments.

At the same time, mindful of Beijing’s concerns that the US is pressuring trade partners to collude at China’s expense, Prime Minister Chinh has been at pains to stress that any deals reached would not be at the expense of any other party.

In the latest round of talks on May 15, senior US Treasury official Robert Kaproth told Vietnam’s Deputy Finance Minister Cao Anh Tuan that the country must implement measures against illegal trans-shipment and trade fraud, while Mr Tuan asked the US to facilitate Vietnamese imports of advanced-tech products from the US to help narrow the trade gap between the two countries.

Sprint period

The global economic uncertainty could scarcely have come at a more critical time for Hanoi, with Mr Lam staking the Communist Party of Vietnam’s legitimacy on an ambitious economic growth agenda it has termed as the country’s “great era of national rise”.

Mr Lam rose to Vietnam’s top leadership after the death of party chief Nguyen Phu Trong in July 2024. It came amid an already extraordinary period of political upheaval that had seen two of Vietnam’s presidents and several other high-level leaders step down having been embroiled amid Mr Trong’s signature “blazing furnace” anti-corruption campaign.

As minister of public security, Mr Lam spearheaded the anti-corruption drive, enabling him to eliminate political rivals while also manoeuvring himself into prime position to succeed Mr Trong. He also amassed enough power to survive a scandal where he was filmed being fed a gold-encrusted steak by celebrity chef Salt Bae at his London restaurant while Vietnam was under Covid-19 lockdowns in 2021.

Mostly seen as a strongman enforcer from a public security background, Mr Lam is now eager to burnish his economic credentials ahead of the 14th party congress in 2026, declaring the lead-up to the Communist Party’s centenary in 2030 as a decisive “sprint period” for Vietnam to attain upper middle-income status.

He has also targeted Vietnam reaching high-income status by 2045, the centennial anniversary of the founding of Vietnam as a socialist republic, thus avoiding the middle-income trap that has ensnared numerous developing economies before it.

To achieve that, however, the Communist Party has targeted 8 per cent growth in 2025 and double-digit growth beyond that – an ambitious prospect at the best of times, requiring healthy global economic growth and full-flowing trade and investment flows.

Instead, that now risks getting derailed with heightened trade tensions between the US and China.

“The global economy saw unprecedented movements in the past months, putting pressure on the management of the macro-economy,” Mr Chinh said on May 5.

But despite growth slowing in the first quarter of 2025, the Prime Minister said the year’s growth target remains unchanged.

To help achieve his country’s lofty growth ambitions, Mr Lam launched an “institutional revolution” streamlining all aspects of Vietnam’s government bureaucracy, the most sweeping restructuring of the state apparatus since the Doi Moi, or “renovation”, reforms in the 1980s.

Announced in December 2024, the party released a blueprint on April 12 detailing that the country will merge its 63 provinces and municipalities into 34. With even more drastic reductions at the district and commune levels, it in effect eliminates or sidelines hundreds of thousands of public sector jobs almost overnight, giving Mr Musk’s Department of Government Efficiency a run for its money.

Similar proposals to tackle Vietnam’s unwieldy number of provinces and the administrative barriers and duplication that hindered economic growth had been mooted before but were ultimately deemed too difficult to manage.

The speed at which the reforms have been rammed through is designed to minimise the likelihood of those on the outer being able to organise and resist change.

Still, there are murmurs of discontent from existing provinces that are due to be wiped off the map.

Thai Binh, for example, a conservative rural province with a proud history of overcoming famine and producing crucial bumper rice harvests to feed soldiers on the front line during various war efforts, will be subsumed entirely by Mr Lam’s home province, Hung Yen, despite having a larger land mass and population.

The new, combined province’s name will simply be known as Hung Yen.

“Hung Yen just has some golf courses and industrial zones here and there. The golf course is for those people – us common folk don’t play golf. People like me used that land to plough fields and make wide rice padis,” 60-year-old silversmith Nguyen Van Tuan told The Straits Times. “For me, the name will forever be Thai Binh.”

An opinion piece carried by the official Vietnam News Agency singled out the merger of Thai Binh and Hung Yen as an example of how it was “not about one province overpowering the other, but rather about combining strengths for development”, noting that Thai Binh’s abundant labour force could more easily find work in Hung Yen’s industrial zones.

“Losing a province name or being far from a province’s centre are natural concerns of people. However, the national vision and the supreme interests of the country must take precedence over these local sentiments,” it said in the April 16 article.

Hanoi is also pushing forward with infrastructure mega-projects to address logistical bottlenecks, including a US$67 billion (S$87 billion) high-speed rail link and an US$8 billion rail connection to China, as well as building new deep-water ports and nuclear power plants.

Mr Lam is also staking Vietnam’s future on a technology-driven economy, allocating 3 per cent of the country’s budget to innovation and technological transformation, and encouraging the nation’s banks to facilitate lending in the infrastructure and technology sectors via a US$20 billion funding package.

China looms

While Vietnam’s current Trump strategy can be summed up as a mixture of appeasement, flattery and placation, it is its dealings with Beijing that underscore the extent of Hanoi’s adroit manoeuvring between the two major powers.

Chinese President Xi Jinping’s visit to Vietnam on April 14 to 15 as part of a three-nation South-east Asia tour during the height of Mr Trump’s tariff threats was a case in point. Mr Xi urged Hanoi to work with Beijing to oppose Washington’s “unilateral bullying” and protectionism. Mr Trump framed Mr Xi’s visit as an attempt to “screw” the US – a perception that might harm Vietnam’s tariff negotiations.

Vietnam’s ties with its bigger neighbour are arguably at their strongest in modern history, reflecting a concerted effort by successive leaders to overcome what has historically been an uneasy relationship, steeped in distrust over border conflicts, territorial disputes in the South China Sea, and divergent geopolitical interests.

Vietnamese leader Lam travelled to Beijing on his first overseas trip within two weeks of coming to power as Communist Party general secretary in August 2024.

There are shared parallels in China’s and Vietnam’s political and economic trajectories, not least the recent use by both parties of an all-encompassing anti-corruption campaign to sideline rivals, consolidate power and force through big changes.

But there are also indications that Hanoi, through the advantage of having an example to follow, has been able to take inspiration and adapt from Beijing’s successes and missteps. For example, the Vietnamese authorities were quicker to relieve pressure building from private sector and real estate crackdowns that resembled China’s.

It is emblematic of the Communist Party of Vietnam’s ability to “learn and localise”, said Ms Ha of ISEAS – Yusof Ishak Institute.

“I think, to some extent, Vietnam always looks to China,” she said. “China is like the trailblazer, you know, and, because the political economy and political system of the two countries are quite similar, China is always the first to do something, and Vietnam is a few steps behind.”

With time ticking on its own favourable demographics and abundant young workforce, Vietnam is also keen to follow China’s lead in moving up the value chain.

Mr Lam has described the world as going through “era-defining changes” and sees the next decade as “the most important period for establishing a new world order”, citing advances in artificial intelligence and other advanced digital technologies as presenting opportunities to countries like Vietnam to leapfrog ahead.

In the joint statement following Mr Xi’s April visit, Mr Lam echoed the Chinese leader’s political slogan of focusing on “new productive forces”, taken to mean high-tech areas like electric vehicles, batteries and renewable energy.

And while the US will remain a major market of Vietnamese exports, it is also hard to ignore the symbolism of the Chinese rail projects confirmed and expedited during Mr Xi’s visit, a reminder of the immutable geographic proximity between China and Vietnam.

They include an US$8.4 billion cross-border railway crossing the breadth of northern Vietnam and connecting China’s landlocked Yunnan province to Haiphong port, via Hanoi, much of it running along the Red River.

“It allows people that invest here in the north (of Vietnam) to have the choice between shipping your container or putting a train through the new connection,” said Mr Bruno Jaspaert, the chair of the European Chamber of Commerce in Vietnam and chief executive of Deep C Industrial Zones, an industrial park operator based in Haiphong.

“That means, in five to six weeks, you can have your container in Europe, not having to use container shipping by (sea). That gives them a flexibility in terms of supply chain that is very, very interesting... it’s definitely possible that it is going to be a game changer.”

Like most transformative mega-projects, perhaps, the site selection in Hung Yen, farther along the Red River, requires a degree of imagination. In neighbouring Hanoi, the province is probably best known for its clusters of industrial parks and for serving as a satellite town for the crowded capital, with hordes of aspirational white-collar workers making the daily hour-long commute across provincial lines from vast residential estates such as Ocean Park, built by conglomerate Vingroup.

But, aside from its proximity to Hanoi, its main attraction appears to be the availability of vast tracts of cheap and undeveloped land, in contrast with the country’s existing tourist destinations that boast an abundance of natural beauty, from white-sand beaches to lush rice terraces.