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Will a New Golf Course Near Hanoi Cement Trump-Vietnam Relations?

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Trans-Pacific View | Diplomacy | Southeast Asia

Will a New Golf Course Near Hanoi Cement Trump-Vietnam Relations?

Last month, the Trump Organization agreed to build a $1.5 billion course in Hung Yen, the home province of Communist Party chief To Lam.

Will a New Golf Course Near Hanoi Cement Trump-Vietnam Relations?

U.S. President Donald Trump visits Hanoi, Vietnam, Nov. 11, 2017.

Credit: Official White House Photo by Shealah Craighead

Who knows what Donald Trump recalls of his first presidency or how much of what went on during those four years will inform the next. Thanks to lobbying by American businessmen in Vietnam and lobbyists paid by Hanoi, Trump was initially favorable toward Vietnam. Then-Prime Minister Nguyen Xuan Phuc was one of the first world leaders to speak to Trump after his election victory in 2016, and Phuc was the first Southeast Asian leader to visit the first Trump White House.

Trump visited Vietnam twice (in 2017 and 2019), more than any other Southeast Asian country. He oversaw the first sales of U.S. military equipment to Vietnam. He selected Hanoi as the venue for his ill-fated talks with North Korean leader Kim Jong Un in 2019. Vietnam’s reputation was the only winner of those talks.

However, Trump’s view of Vietnam started to sour in 2019. That year, he accused it of being the “worst abuser” of trade practices. His administration began the process of sanctioning Vietnam for alleged currency manipulation, although that was quickly stopped by the Biden administration.

Hanoi has been unnerved throughout the year by the prospect of another Trump presidency, although its leaders have all now offered their congratulations for his victory this week. On the campaign trail, he vowed to impose a blanket 10-20 percent tariff on all imports from all countries. As the largest exporter to the U.S. in Southeast Asia and, after Singapore, the country most dependent on foreign trade, that should rightfully concern Hanoi.

Last month, the ratings agency Fitch estimated that a second Trump term could weaken Vietnam’s annual GDP growth by 1 percent by 2028. Hanoi also has to face the fact that its surplus with the U.S. stood at $55 billion in 2019 when Trump remarked that it was the “biggest abuser” of U.S. trade. As of last year, it had risen to $104 billion. There is ample evidence that China is now routing more goods via Vietnam to the United States to escape tariffs and sanctions, which might actually get a reaction from Washington under Trump.

On the other hand, there’s much in Trump that Vietnam should like. Washington became almost inoperably myopic about the Communist Party of Vietnam (CPV)’s human rights abuses under the Biden administration. Trump is medically blind when it comes to democracy and human rights. Given his penchant for authoritarian figures, Trump may find it easier this time around to work with the current Vietnamese leadership. To Lam, a former minister of public security, is party chief, and the National Assembly last week appointed former military chief Luong Cuong as the new state president, meaning that power in Hanoi is now divided between the public security apparatus and the military.

Hanoi might privately make a fuss about the United States’ incoming protectionism, but all it’s actually getting is the mirror-image of Southeast Asia’s and its own transactional diplomacy. One cannot feign any compassion for Hanoi when Trump pursues the same realpolitik that the Vietnamese have pursued for decades. Vietnam has long pleaded with Washington to take a half-values approach: international trade but not international law. Trump’s merely going the whole hog in this degradation.

There’s one other thing about Trump that Vietnam knows all too well: his obsession with his own family wealth. Was this the reason behind the announcement on October 8 that the Trump Organization, his family business, signed an agreement with Vietnamese real estate developer Kinh Bac City Development to build a $1.5 billion golf course and resort in Vietnam’s Hung Yen province, just outside Hanoi?

A memorandum of understanding was signed last month, while CPV chief To Lam was visiting the United States, by officials from the Trump Organization, the People’s Committee of Hung Yen province, and Kinh Bac City Development Holding. Trump himself attended the signing ceremony and was photographed sitting next to his son Eric Trump and Dang Thanh Tam, chairman of Kinh Bac City and a tycoon with significant political influence.

This development surely raises the possibility of a potential conflict of interest under the next Trump presidency – or, at least, it means the specter of self-interest will stalk his dealings with Vietnam. Hung Yen, the site of the planned resort, is the home province of To Lam and his vast and dominant provincial faction, including the new Public Security Minister Luong Tam Quang and the new Justice Minister Nguyen Hai Ninh. Through this deal, Trump’s family firm is now tied to the ascendant faction within the CPV.

Trump’s family conglomerate received at least $7.8 million in payments from 20 countries during his first term as president, according to one study. Trump is again unlikely to divest from the Trump Organization, meaning he will have a direct stake in its latest investment in Vietnam. A report by Citizens for Responsibility and Ethics in Washington argued that “the line between the Trump Organization and the Trump administration has blurred so much that it is unclear where President Trump’s public responsibilities end and his private financial interests begin.” It also found that between his inauguration in January 2017 and mid-September 2020, Trump visited his businesses 503 times, of which more than half were trips to his golf courses.

Another investigation later found that the U.S. Defense Department spent nearly $1 million at Trump properties between July 2017 and November 2019. So did many other U.S. government agencies. In 2019, Trump allegedly redirected Air National Guard flights to lay over at Scotland’s Prestwick Airport, rather than more convenient U.S.-controlled air bases, to boost revenue for one of his struggling golf courses.

In January of this year, a member of the House of Representatives Oversight Committee, Jamie Raskin, argued that Trump “repeatedly and willfully violated the Constitution by failing to divest from his business empire and allowing his businesses to accept millions of dollars in payments from some of the most corrupt nations on earth.” He went on to accuse Trump of “personally enriching [himself] while he made foreign policy decisions connected to their policy agendas with far-reaching ramifications for the United States.”

The new venture in Vietnam certainly gives the Trump Organization – and, so, Trump himself – a vested interest in Vietnam’s tourism sector improving. “Vietnam has tremendous potential for luxurious hospitality and entertainment,” Eric Trump, Donald’s son and executive vice president of the family firm, said in a statement last month. More importantly, there’s an added incentive for Trump to bolster Vietnam’s international image. (Surely, he now has a personal interest in no longer calling Vietnam the “worst abuser” of U.S. trade, as he did in 2019.) Hanoi’s international airport is the closest to his firm’s planned resort, and it isn’t hard to imagine Trump more regularly visiting Vietnam to combine the official and personal, nor difficult to think of him petitioning Southeast Asian leaders to hold a meeting or two at his Vietnamese golf course.

It will make it easy for Vietnam’s diplomats and hired lobbyists to get a foot in his White House door by talking about his investments. Would his administration think twice about punishing Hanoi for its trade surplus and transshipments if it indirectly meant imperiling his golf resort? Should he meet with Lam or Cuong, what would be the first topic of discussion: his family’s or America’s interests?

Whether the golf resort comes off or not, it was a canny move by Hanoi and its influencers to get the Trump Organization to commit to an investment. It buys the country’s most powerful faction influence in the next U.S. administration.