To cut tariffs, Vietnam gives Trump a golf course

When President Donald Trump announced a 46 per cent tariff on imports from Vietnam on April 2, “Liberation Day”, the country came up with a novel response – giving him a gold course.

On May 21, Vietnamese Prime Minister Pham Minh Chinh and Trump’s son Eric attended a ceremony to start work on the Trump International Hung Yen, an area of 1,000 hectares with a total investment of over US$1.5 billion.

The complex will boast a 54-hole VIP golf course, a resort, a modern urban area, and upmarket amenities. It is being developed by The Trump Organization and Hung Yen Hospitality, a subsidiary of state-owned Kinh Bac City Development Holding Corporation.

Construction is expected to be finished by the second quarter of 2029. Hung Yen is 40 kilometres southeast of the capital, Hanoi. The site will include a hotel, luxury villas, and a residential area for 30,000 people over nearly 10 square kilometres in a rural area along the Red River.

While leaders around the world struggle to find a way to interact successfully with the tempestuous U.S. President, Vietnam has come up with a novel approach.

Billions of dollars in trade and investment are in play. In the first five months of this year, the U.S. continued to be Vietnam’s largest export market, with exports of US$57.2 billion and a trade surplus of US$49.9 billion, up 28.5 per cent on the same 2024 period. The main export items were computers, electronic products, and components, as well as textiles, footwear, and machinery.

On April 2, Trump hit Vietnam with the 46 per cent figure because it had the third largest trade surplus with the U.S, after China and Mexico. He later postponed the tariffs with Vietnam and other countries for 90 days. Since then, the two sides have been negotiating the level of the tariffs.

Vietnam has been the major beneficiary of the “China Plus One” strategy. Mayor foreign companies want to diversify their production out of China. Vietnam offers a diligent workforce who is cheaper than in China. It can easily buy needed parts and components from its northern neighbour. It has a long coast and large ports that facilitate exports.

So Trump’s tariffs pose an almost existential threat. Michael Kokalari, chief economist of VinaCapital, a Vietnamese investment firm, said that, were the U.S, to impose a tariff of 35 per cent, Vietnam’s GDP growth would fall from the government target of eight per cent to 6.1 per cent.

A 20 per cent tariff would cut GDP growth by between 0.8 per cent and 1.3 per cent, he said.

All this explains the indecent haste whereby the new golf project was approved. Such projects normally take two-three years for approval. For this one, only three months passed between the submission of the initial planning documents and May 21.

Several steps were not followed, including full land acquisition, public consultation and environmental impact studies.

The area is covered by farms of oranges, pomelos, peace blossoms and kumquat trees. All will be cleared for the luxury project.

Local people interviewed by foreign reporters at the opening ceremony expressed support for the project but some said they were concerned over financial compensation. Chinh repeatedly said that local people would be fairly compensated.

Eric Trump attended the opening ceremony with his wife Lara. He also visited Ho Chi Minh City, formerly Saigon, to meet officials to explore plans for a Trump Tower in the city.

Vietnam is also vulnerable because many of its goods contains parts and components from China, Trump’s major target. Chinese companies are major investors in Vietnam.

Vietnam is China’s largest ASEAN trade partner and fourth globally. During the first three months of 2025, bilateral trade volume between the two reached US$51.25 billion, marking a 17.46 per cent increase year on year.

Chinese FDI in Vietnam has reached US$31.26 billion, making China Vietnam’s sixth-largest foreign investor.

Much depends on how U.S. negotiators define “Chinese goods” that are made abroad? If more than half of its components come from China, is a product Chinese?

The golf project and a Trump Tower in Saigon may be a small price to pay.