Major Vietnamese steel producers, such as Hoa Phat, Hoa Sen, and Nam Kim, now confront formidable challenges.
Some argue that the US market constitutes a relatively small portion of Vietnam’s aluminium and steel exports. Vietnamese steel producers have been contending with a 25% tariff since 2018, suggesting the current increase may not significantly impact these enterprises. However, the repercussions are more pronounced for aluminium exporters, who previously faced only a 10% tariff.
According to the Vietnam Steel Association (VSA), in 2024, Vietnam exported approximately 12.62 million tonnes of steel, marking a 13.47% increase from 2023, with export values reaching 9.08 billion USD—a rise of 8.78%. The US emerged as Vietnam’s third-largest export market, accounting for 13% of the share, following ASEAN (26%) and the EU (23%).
Although the US market represents 13% of total steel export turnover, it holds strategic significance for Vietnamese steel and sheet metal manufacturers. The US steel demand relies 12% to 15% on imports, equating to about 20-25 million tonnes annually, presenting a potential market for Vietnam if trade barriers can be navigated.
However, with the new tariff rates, the already thin profit margins of Vietnamese enterprises are likely to tighten further, posing the risk of losses if business strategies are not promptly adjusted. The increased costs of Vietnamese aluminium and steel products for US importers may render them less competitive compared to domestically protected goods.
Not stopping there, a “domino effect” caused by market bottlenecks in the global steel industry will force major steel-exporting countries such as Canada, Mexico, Brazil, and the Republic of Korea to seek alternative markets to offload their excess supply. This will put Vietnam’s steel industry at an even greater disadvantage if domestic enterprises do not quickly develop effective competitive strategies.
Moreover, due to its proximity to China—the world’s largest steel producer—Vietnam is highly susceptible to becoming a destination for cheap steel imports. As a result, domestic steel prices could plummet, squeezing businesses and increasing the risk of anti-dumping lawsuits from other countries.
To effectively respond to the market fluctuations triggered by US tariff policies, Vietnamese steel and sheet metal manufacturers must stay informed about market trends and proactively develop appropriate business strategies. Enterprises should continue investing in innovation, upgrading technology, and improving product quality while optimising costs to minimise the negative impacts of increased tariffs.
Most importantly, Vietnamese businesses must strictly avoid any violations related to “origin fraud”—an issue that the US closely scrutinises in imported goods. Additionally, the government should implement strong support policies to enhance the competitiveness of the steel industry, helping businesses shift their export strategies and develop more effective distribution channels.
Furthermore, Vietnam should actively promote free trade agreements to ease the pressure of trade defence measures from other countries. The government should also assist enterprises in finding strategic trade partners who can contribute to the long-term sustainable development of Vietnam’s steel industry.
