Steel tariffs "heat up"

Donald Trump has declared that in order to protect the American steel sector, steel tariffs will be raised from 25% to 50%. This strategy severely condemns cheap steel from China and seeks to decrease imports of steel from nations like Canada, Mexico, Brazil, South Korea, and Vietnam. Furthermore, anti-dumping (AD) penalties of 10–25% on Vietnamese galvanized steel are being contemplated by the United States.

At the moment, Vietnam's steel sector leads the ASEAN and ranks 13th globally in terms of steel production. The US market will only make up a modest percentage of Vietnam's total steel exports (about 5–10% for large firms), despite the country exporting approximately $1 billion worth of steel to the US in 2024—a 159% increase from 2023.

Tran Hoang Son, Director of Market Strategy at VPBankS, said Vietnam's steel shipments to the US sharply declined following the April tariff storm. Perhaps steel companies and galvanized steel have turned their attention away from the US and toward other markets. Since it is now June, the direct effects of the 50% tariffs on Vietnamese galvanized steel companies have considerably diminished, according to Son, since US importers have also actively reduced their purchases of Vietnamese steel.

Son's remarks are fairly similar to those made by many Vietnamese companies. For example, Hoa Sen Group (HSG) stated that it ceased exporting steel to the United States last year in order to prevent the possibility of steel anti-dumping investigations and the imposition of trade restrictions on both steel and aluminum.
"The impact of the US tariffs will be reflected in 2Q25 due to a certain delay," Son stated.

Impact on businesses

KBSV noted that the 50% tariffs will raise costs for US importers and decrease demand for Vietnamese steel, based on data from both the US market and other countries (such as Mexico). Businesses that rely significantly on the US market will be negatively impacted, particularly those that sell galvanized steel. Companies like NKG, which generates 26.2% of its sales from the US and Mexico markets; GDA, which generates 31.9%; and HSG, which generates 18.6%, will be particularly under pressure.

Theoretically, inexpensive steel from China may be diverted to other markets, such as ASEAN and the EU, where Vietnam is a competitor, according to experts. Steel prices may decline as a result, and Vietnamese companies' profit margins may shrink. Nonetheless, the Ministry of Industry and Trade decided to impose temporary anti-dumping taxes on a number of hot-rolled steel goods coming from China and India from the beginning of 2025. Vietnamese steel benefits domestically as a result.

In the context of moving to other nations, steel and galvanized steel companies may generally need to lower selling prices, compete more aggressively, and impact net profit margins, according to experts. Expectations for the long-term prospects of the Vietnamese steel industry, including the potential for growth in new Asian markets, domestic consumption, and governmental investment, have not changed.

Stock Outlook

Many analysts believe that among steel stocks, investors should look at the following stocks:

Hoa Phat Group Joint Stock Company's HPG shares come first. Since only 2.9% of this company's total income comes from the US market, it was least impacted by US tariffs. HPG is anticipated to achieve a net profit rise of 28–29% in 2025, reaching approximately 15.3 trillion VND, thanks to its substantial domestic market share of HRC and building steel (38%), as well as the operation of the Dung Quat 2 complex starting in 1Q25. Because of HPG's domestic market potential and fair valuation, SSI Research and KBSV have good evaluations of the company. Investors should be aware of the risks associated with this business, including changes in the price of raw materials and pressure from overseas investors to sell.

The Hoa Sen Group Corporation's HSG shares come in second. Due to early market movements and the domestic recovery, this company has indicated that it can generate very strong financial results for the year. If HSG concentrates on the domestic market and successfully enters other markets, it can counteract the effect of tariffs on the US market and restore its significant domestic market share in galvanized steel.

Nam Kim Steel Corporation's NKG shares come in third. NKG's business results in 2025 will be flat, according to KBSV, because of the company's strong reliance on exports and the pressure from anti-dumping duties. Due to the substantial risks associated with trade protection policies and competition from Chinese steel, investors should exercise caution when purchasing NKG stock.

Ton Dong A Corporation's GDA stock comes in fourth. In 4Q24, GDA's exports of galvanized steel fell by 28%, and the provisional anti-dumping duty (40–88%) will keep straining the business's earnings. GDA continues to face numerous challenges in the near future. If the business modifies its approach, the domestic market's resurgence can sustain its stock price over the long run.