“The Impacts of the US’s Tariff on Vietnam’s Steel and Aluminium Exports”

I. Introduction

1. Rationale for Choosing the Topic

The resurgence of global trade protectionism, particularly the U.S. reintroducing a 25% tariff under Section 232 on
steel and aluminium imports (effective March 12, 2025), significantly affects Vietnam—a key exporter of these
commodities. Given the strategic importance of these industries to Vietnam’s economy, including their contribution
to GDP, employment, and key downstream sectors, the tariff could undermine export revenues, competitiveness, and
bilateral trade relations. Thus, a focused analysis is both timely and essential.

2. Research Objectives and Tasks

The main goal is to assess the direct and indirect economic effects of the U.S. 25% tariff on Vietnam’s steel and
aluminum exports. The research evaluates impacts on turnover, market share, and corporate finance, alongside
supply chain disruptions, increased domestic competition, and heightened risks of origin fraud. It further provides
recommendations for both the government and businesses to adapt and sustain competitiveness.

3. Research Subjects and Scope

The study centers on Vietnam’s steel and aluminum export sectors. It draws from pre-2025 data (notably
2018–2019) to assess short- and long-term impacts, considering global trade dynamics with a focus on U.S.-Vietnam
relations and regional trade positioning.

II. Main Content

1. Theoretical Framework

Key concepts such as taxation, steel and aluminum trade dynamics, export turnover, market share, and corporate
finance are defined. Tariffs impact trade directly (via prices and volumes) and indirectly (via supply chains,
competitive shifts, and origin fraud).

2. Overview of Vietnam's Steel and Aluminum Exports

●​ Steel: Between 2021–2024, Vietnam exported 11–12.6 million tonnes of steel annually. Exports to the U.S.
rose to 1.7 million tonnes, valued at $1.3 billion in 2024. ASEAN (31%) and the EU (23%) were key
alternative markets. Domestic production also surged due to investments by Hoa Phat and Formosa.​

●​ Aluminum: Vietnam exported over $2.5 billion worth of aluminum in 2022. U.S. imports reached $479
million in 2024, primarily semi-finished products. However, Vietnam lacks domestic smelting capacity and
relies on imported raw materials while producing alumina domestically via Vinacomin.​

3. The U.S. 25% Tariff Policy and Its Actual Impact

3.1 Objectives and Rationale

The U.S. implemented the tariffs to protect domestic industries under national security pretenses, limit foreign
dependency, close evasion loopholes, and maintain strategic production capacity—particularly from countries like
China. Vietnam lost prior partial exemptions and now faces the full 25% rate, largely due to concerns over
transshipment.
3.2 Direct Impacts

●​ Export Turnover and Volume: A projected 20–30% drop in steel and aluminum export turnover is
anticipated within 1–2 years. Historical data from 2017–2019 supports this: in 2019, after tariffs, steel
exports dropped 48.6% in value and 47.5% in quantity, while aluminum (at just 10% tariff) continued to
grow.​

●​ Market Share: Vietnam’s 2024 U.S. market share was 4.4% (steel) and 1.46% (aluminum). Tariffs risk
erosion as Vietnamese goods become less price-competitive, despite the fact that countries like Canada and
the EU face similar tariffs.​

●​ Corporate Finance: Firms with high U.S. exposure (e.g., Ton Hoa Sen at 9% revenue) face margin
compression. However, opportunities exist due to uniform tariffs leveling the playing field. High
production costs (e.g., U.S. “melted and poured” rules) further squeeze exporters.​

3.3 Indirect Impacts

●​ Global Supply Chain: As U.S. demand shifts, supply chains reorient, creating port congestion and
increasing Vietnam’s logistical and pricing pressures.​

●​ Domestic Competition: Chinese steel redirected to Vietnam has surged 500% since 2020, prompting
anti-dumping tariffs of up to 37% on Chinese products to protect Vietnamese producers.​

●​ Trade Defense Risks and Origin Fraud: Vietnam faces heightened scrutiny from U.S. trade authorities,
with penalties up to 160% in past anti-dumping cases. Increased origin fraud—especially via transshipped
Chinese goods—has led to Directive 09/CT-BCT, strengthening origin verification.​

4. Vietnamese Responses

4.1 Government

Vietnam’s Ministry of Foreign Affairs reaffirmed its commitment to dialogue with the U.S. and compliance with
international obligations. It pledged to monitor developments, apply countermeasures, and uphold trade relations
while preventing abuse of its FTAs.

4.2 Enterprises

Corporations such as Hoa Phat and Toan Thang Steel are diversifying markets, upgrading technology, improving
quality, and aligning with origin regulations. Firms are cooperating with trade authorities and embassies to remain
compliant and competitive.

5. Proposed Measures and Development Directions

5.1 For the Government

●​ Strengthen Origin Verification: Implement digital traceability tools (e.g., blockchain, e-certificates).​

●​ Diplomatic Engagement: Continue constructive dialogue with the U.S. to maintain bilateral relations.​

●​ Enforcement & Monitoring: Enact stricter customs oversight and rapid response to evolving global trade
shifts.​
5.2 For Enterprises

●​ Diversify Markets: ASEAN, EU, India, Australia, and South America are identified as growth
opportunities.​

●​ Improve Product Quality: Shift toward high-value, differentiated products.​

●​ Optimize Costs: Focus on production efficiency to maintain margins.​

●​ Ensure Compliance: Align with U.S. rules on origin and cooperate with trade authorities to avoid
sanctions.

III. Conclusion

The U.S. 25% tariff policy presents serious challenges but is not catastrophic for Vietnam’s steel and aluminum
sectors. While profit margins will shrink and competition will intensify, companies that innovate and diversify can
withstand the shock. The tariff environment also brings opportunity—new markets, upgraded products, and
improved trade strategies. Future studies should explore comparative responses of other affected nations and the
long-term global trade restructuring post-tariffs.