The United States is set to impose new tariffs on steel and aluminum imports, continuing the economic protection strategy initiated by President Donald Trump back in 2018. This latest move, announced on February 10, 2025, will see tariffs raised to 25% on all imports of these metals, effective March 4, 2025. The new tariffs will eliminate prior exemptions for some nations, consolidifying the government’s stance on safeguarding domestic producers.
While the intention behind this significant policy decision is primarily to support American steel industries facing increased foreign competition, it has also stirred discussions on its potential effects abroad, particularly for Vietnam. Historically, Vietnamese steel has been subject to the same 25% tariff since the initial Section 232 tariffs were enacted. Therefore, the impact of the new legislation on Vietnamese exports appears to be minimal.
According to analysis from SSI Research, the announcement brings forth limited repercussions for Vietnam's steel sector. The firm highlights the unique position of Vietnam; since 2018, its steel imports to the U.S. have consistently faced the 25% tariff, meaning the new penalties do not change the playing field significantly. Rather, the new tariffs might be seen as leveling the competitive environment. "The new tariffs could even be somewhat positive for the Vietnamese steel industry by bringing Vietnam's tariff rates equal to those of other countries," SSI Research commented.
The report also notes the relatively small export volume of Vietnamese steel to affected countries. For example, steel exports to Canada and Mexico are negligible, positioning them outside the top ten markets for Vietnamese steel exporters as of December 2024. Citing data from the Vietnam Steel Association, firms like Hòa Phát (HPG) and Hoa Sen Group (HSG) contribute merely minor percentages of their revenue from these markets, with figures like HPG achieving just 1.5% from U.S. exports.
This focus on the potential benefits for Vietnam amid tariff impositions also looks at the broader economic dynamics. Although challenges loom due to the overcapacity of steel production originating from China, the rebound of domestic demand remains noteworthy. SSI Research suggests strengthening domestic consumption to reach approximately 21 million tons of steel by 2025, buoyed by the construction sectors and public investment initiatives.
When assessing market trends, FIDT also mentioned correlations between the tariffs and market reactions. Historically, when the U.S. has enacted tariffs, U.S. distributors have tended to ramp up imports before the implementation date. This behavior continues to create upward pressure on prices which can indirectly benefit Vietnamese steel exporters over time, even with the new regulations at play.
Another layer under consideration is the multiple types of anti-dumping measures and countervailing duties (CVD) which still undergo investigations, complicate the final assessment of the tariffs’ effects. The preliminary CVD findings recently released showed minimal duties against some Vietnam steel producers, establishing expectations for potential AD duties also to emerge soon. These investigations highlight how American regulatory actions continue to evolve as economies globally adapt to new market realities.
Despite these challenges, optimism remains for Vietnam’s steel industry moving forward. The anticipated launch of projects like the Dung Quất 2 integrated steel complex—expected to bolster production capacity by 50%—could help companies navigate the competitive environment created by these tariffs. Market projections indicate strong demand driven by recovery post-COVID-19 and public infrastructure spending, reinforcing confidence among investors and stakeholders.
Overall, though the U.S. steel tariffs represent significant changes to trade dynamics, the Vietnamese steel sector appears poised to weather the storm. With proactive strategies and responsive market insights coming from key analysts, Vietnamese companies may find pathways to thrive, even within the broader restrictions imposed by U.S. tariffs.