HANOI – The recent announcement by U.S. President Donald Trump to impose a 25 percent tariff on imported steel and aluminium, effective March 4, poses significant challenges for Vietnamese businesses reliant on these exports. According to the Vietnam Steel Association (VSA), the U.S. stands as the third-largest export market for Vietnamese steel, contributing approximately 13 percent to the nation’s total export revenues, trailing only behind the ASEAN region and the European Union.
While this level of reliance might not seem extremely high, industry experts suggest the new tariffs could still have serious consequences for major steel producers across Vietnam. Trương Hiền Phương, Senior Director at KIS Việt Nam Securities, conveyed to baodautu.vn his outlook on how the tariffs would undoubtedly impact Vietnamese steel exports but reassured stakeholders by stating it wouldn’t be to an unbearable extent. "The U.S. doesn’t make up the majority of our steel export revenue," he noted, implying there are buffers against major losses.
Firms like Hòa Phát Group, Hoa Sen, and Nam Kim Steel could potentially offset losses by redirecting operations toward alternative markets. Yet the same cannot be said for the aluminium sector, which is likely to feel the brunt of the tariffs more acutely. Prior to the escalation, the U.S. had already instituted a 10 percent tariff on aluminium imports, and with the increase to 25 percent, Vietnamese exporters are now staring down considerable cost pressures.
Trương Hoàng Nam, Director of EuroHa Joint Stock Company – one of the major aluminium exporters to the U.S. with annual earnings topping US$7 million – expressed dismay at the elevated tariffs, indicating, "At ten percent, we could still remain competitive; at 25 percent, higher production costs put us at risk of losing customers. Our team is currently collaborating with the Vietnam Aluminium Association and the Trade Remedies Authority of Việt Nam to evaluate the situation and strategize responses to mitigate potential losses."
Economic expert Đinh Trọng Thịnh views the new U.S. tariffs as both challenge and opportunity within the larger framework of international trade. He pointed out, "While this hike makes it harder for Vietnamese exporters to compete price-wise, it’s worth mentioning other countries, including those within the EU, Canada, and Mexico, are facing the same tariff rates on aluminium.”
Such reality may level the playing field for certain Vietnamese steel exports, which often contend with competition from countries accustomed to lower tariffs. Thịnh indicated steel exporters might still find potential opportunities to solidify their standing within the U.S. markets.
Conversely, aluminium exporters would experience greater difficulties, demanding reassessment of pricing strategies as demand may dwindle under intensified cost pressures. Dương Đức Quang, Deputy General Director of the Vietnam Commodity Exchange (MXV), warned against panic. Instead, he urged exporters to embrace adaptability and improve internal efficiencies. He pointed out the necessity of seeking out new international markets to decrease dependency on U.S. demand.
"Investment in advanced technologies to craft higher-value aluminium products can also serve as one route to mitigate tariff impacts,” Quang stated, alongside advocating for enhanced collaboration with government entities to navigate and understand trade policies more effectively.
Both Thịnh and Quang agreed on bolstering the domestic market as part of potential strategies moving forward. By focusing on lesser-reliance on major export destinations like the U.S., shifting logistics optimization, and lowering production costs, the hope is to maintain competitiveness amid the shifting tides of international trade.
Experts acknowledge the inevitable difficulties arising from the 25 percent tariff, yet they insist this hurdle is far from insurmountable. The broad application of the tariff across all exporting nations means Vietnam continues to hold its ground competitively on the global stage.
Reflecting on these trade relations, U.S. Ambassador to Vietnam, Marc Knapper, reaffirmed the importance of the economic partnership between the two countries. He noted, "The U.S. values its trade relationship with Vietnam and as we approach 2025, marking the 30th anniversary of diplomatic relations, we are optimistic about the prospects for expanded economic cooperation moving forward."
While the geopolitical dimensions of the new tariff climate continue to take shape, it is clear Vietnamese businesses must remain agile, capable of pivoting strategies rapidly to endure and thrive.