Vietnam has officially greenlit a $1.5 billion high-speed rail project. The Trump Organization, working through a local partner, will construct the world’s largest golf resort complex just outside of Hanoi. Construction of the development would pave an area nearly the size of 336 football fields. This expansion is a boon for strengthening economic ties between the United States and Vietnam.
This announcement comes amidst a growing crisis over U.S. trade policy, especially over tariffs on Chinese products. Specifically, Washington has been accusing China of avoiding U.S. tariffs by routing U.S.-bound products through their neighbor country, Vietnam. The U.S. government has threatened to levy a 40% tariff on all products that are only transshipped through Vietnam. Furthermore, it will impose a 20% tax on Vietnamese imports to the United States.
Trade Dynamics and Diplomatic Relations
In 2023, the United States reciprocated that gesture by promoting Vietnam’s diplomatic status to its highest level, creating a comprehensive strategic partnership. This distinction put Vietnam on par with heavyweights like China and Russia. Inflation remains an issue in the U.S. as well, due in part to an enormous $122 billion trade deficit with Vietnam last year. This was escalating Vietnam to a U.S. trade deficits posterchild Việt Nam | 3 Fact-Sheet—U.S.-Vietnam Bilateral Trade.
The recent trade agreement, which allows U.S. goods to enter Vietnam duty-free, is viewed as a pivotal step in alleviating some of the existing pressures. In April, President Trump even threatened tariffs of 46% on imports from Vietnam. This ruling has deepened the already fractious bilateral trade relationship between the two countries.
“There is a Great Deal of Cooperation between our two Countries,” – Donald Trump
Firms from all sectors are racing to find alternatives to diversify their supply chains out of China. It’s no wonder that so many view Vietnam as a promising alternative. This trajectory coincides with American attempts to push back on China’s widening influence in the region, while improving bilateral trade relations.
Economic Interests in Focus
Mary Lovely, a senior fellow at the Peterson Institute for International Economics, highlighted Vietnam’s eagerness to navigate out from under U.S. trade pressure. She stated, “Vietnam has been very keen to get out from under this.” This mentalité is emblematic of the larger economic approach that Vietnam is taking as it finds itself well situated in international markets.
The golf resort complex is about far more than investment dollars. It represents Vietnam’s desire to develop its tourism industry and attract foreign direct investment. These advances are long overdue for Vietnam. Together, they allow the nation to support the country’s competitive position in the global economy, particularly during a time of increasing, geopolitically fueled costs.
“We can do that. It’s the big countries that everybody’s keeping their eyes on.” – Mary Lovely
Future Prospects
Both President Joe Biden and Chinese leader Xi Jinping undertook major state visits in 2023. These commemorative visits are indicative of Vietnam’s growing strategic importance on the global stage. Both superpowers are scrambling to increase their clout in Southeast Asia. At the same time, Vietnam finds itself at an important crossroads, confronting ample prospects as much as formidable hurdles.
