President Donald Trump's announcement regarding the increase in import tariffs on steel and aluminum to a fixed rate of 25% and the removal of all exemptions for all countries are expected to impact many businesses exporting these products to the U.S. from various nations.

According to the announcement, this is an extension of the Section 232 tariffs enacted in 2018 by Trump, which initially imposed a fixed 25% tariff on steel imports but included exemptions for certain countries such as Canada, Mexico, Brazil, South Korea, and the United Kingdom. The new tariff maintains Section 232 tax while eliminating all exemptions. The new law will take effect on March 4, 2025.

Commenting on this issue, SSI Securities' research division stated that, for Vietnam, steel imports into the U.S. have been subject to a 25% tariff since 2018 under Section 232. Therefore, Vietnamese steel is not affected by this tariff increase. As a result, there is minimal impact on Vietnam’s steel industry regarding exports to the U.S.

"The new tariff measure could even have a slightly positive impact on the Vietnamese steel industry as it brings Vietnam's import tariff (before considering other protective duties) to the same level as other countries. Vietnam’s steel exports to affected nations such as Mexico and Canada are also relatively small (as of December 2024, they were not in the top 10 export markets for Vietnamese steel, according to VSA data)," SSI Research noted.

Additionally, the research division highlighted that the final impact could be complex to determine, as there are other tariffs such as countervailing duties (CVD) and anti-dumping duties (AD), with the latter still under investigation. Recently, the U.S. issued preliminary investigation results and provisional CVD rates on Vietnam's corrosion-resistant steel, with Hoa Sen Group (stock code: HSG) and Ton Dong A (stock code: GDA) getting low tariffs (0.13% and 0%, respectively). Preliminary AD results are expected to be revealed in the next few months.

Speaking with DĐDN, Mr. Vu Van Thanh, CEO of Hoa Sen Group, also stated that for years, Vietnamese steel exporters to the U.S. have already faced a 25% tariff while many others enjoyed exemptions. Now that companies in other countries will also be subject to the same tariff rate, it does not negatively impact Vietnamese enterprises and, in some respects, even creates an opportunity. As such, HSG will continue its production and export activities to the U.S. market as before, Mr. Thanh affirmed.

In Q1 2025, HSG reported a net revenue of VND 10.2 trillion (1% QoQ; 13% YoY) and a net profit after minority interest of VND 166 billion (a significant 60% YoY increase and a turnaround from a loss of VND 186 billion in the previous quarter), according to the company's financial report. HSG's fiscal year ends on September 30 every year. 499,500 tons of coated steel sheets and steel pipes were sold overall (flat QoQ; 11% YoY).

Due to stable sales volume and average selling prices, HSG's revenue stayed consistent with the prior quarter. This was ascribed to HSG's increased emphasis on the home market, despite a notable rise in profitability.

The U.S.-Mexico export market contributes a significant portion of revenue for Hoa Phat (stock code: HPG), accounting for 40-60% of its total revenue, with the U.S. ranking as its third-largest market after Asia and Europe. For HSG, the figure is approximately 18.6%. Other companies, such as Nam Kim Steel (NKG) and Ton Dong A (GDA), have export shares of 26.2% and 31.9%, respectively. However, with the opportunity for "fair competition," the impact of U.S. import tariffs is no longer seen as a major concern.

Taking an optimistic view, Maybank Securities' analysis team assessed that the U.S.'s broad application of aluminum and steel tariffs is a positive development for Vietnamese steel products. This change is expected to enhance the competitiveness of Vietnamese steel in the U.S. market.

"With recent preliminary determinations in countervailing duty (CVD) investigations, the biggest beneficiaries are likely to be HSG and GDA, in our view. However, we should await the final decision and further preliminary results from the investigation into Vietnamese coated steel producers in April," Maybank Securities analysts stated.

SSI Research forecasts that the steel industry outlook for 2025 remains positive, based on the fact that steel prices have bottomed out, domestic demand is strengthening due to a recovery in the real estate sector and robust public investment, and there is an expectation of anti-dumping duties being imposed on hot-rolled coil (HRC) from China and India under the base-case scenario.

Assessing the impact of tariff policies on the coated steel and steel segment, KBSV highlighted the importance of HRC (hot-rolled coil) supply for coated steel production. In 2024, HSG, NKG, and GDA exported approximately 450,000 tons to the U.S.-Mexico market, and the HRC demand for producing these goods is not expected to affect domestic HRC suppliers such as HPG. However, KBSV also noted that manufacturers would increase competition in the domestic market to maintain revenue growth, and steel companies with a strong domestic market share would have an advantage in sustaining revenue growth in the coming period.

An industry expert pointed out that companies do not solely rely on HRC from Hoa Phat but also source from China. As a result, businesses need to proactively expand into new markets and regions that have not imposed trade barriers on Vietnamese steel to maintain sales volume. At the same time, they should be cautious in preparing for potential trade defense measures and origin-related investigations that could be imposed in the future.