Economic strain: Construction workers build the metal structure of a house in Hanoi. The new US tariffs are seen as both a challenge and an opportunity. — AFP
HANOI: US president Donald Trump’s 25% tariff on imported steel and aluminium, effective March 4, aims to protect its domestic industry – but it will pose challenges for Vietnamese businesses.
According to the Vietnam Steel Association, the United States is currently the third-largest export market for Vietnamese steel, accounting for 13% of total export turnover, behind Asean and the European Union.
Although this level of dependence is not particularly high, the new tariffs could still impact major steel producers in Vietnam.
KIS Vietnam Securities senior director Truong Hien Phuong told baodautu.vn that the tariffs will certainly affect Vietnamese steel exports but not to a severe extent, as the United States does not constitute the majority of total steel export revenue.
Companies like Hoa Phat Group, Hoa Sen and Nam Kim Steel still have alternative markets to compensate for potential losses.
However, experts warn that the 25% tariff increase will be more significant for the aluminium industry.
The United States previously imposed a 10% tariff on aluminium imports, but with the increase to 25%, exporters will face significant cost pressures.
EuroHa Joint Stock Company director Truong Hoang Nam – a major aluminium exporter to the United States with an annual turnover of over US$7mil – expressed concerns over the new tariffs.
He noted that at 10%, Vietnamese aluminium could still compete, but at 25%, higher production costs could lead to losing customers.
EuroHa is currently working with the Vietnam Aluminium Association and the Trade Remedies Authority of Vietnam to assess the situation and explore solutions to mitigate potential losses.
Economic expert Dinh Trong Thinh sees the new US tariffs as both a challenge and an opportunity.
While the higher tariffs will make it harder for Vietnamese exporters to compete on price, he highlighted that other markets like the European Union, Canada and Mexico are also subject to the same tariff rates. This means Vietnam’s competitiveness is not uniquely affected.
For the steel industry, Thinh believes Vietnam still has opportunities in the US market.
He explained that many countries that previously enjoyed lower tariff rates were now facing the same 25% tariff, which could level the playing field for Vietnamese steel exports.
However, for aluminium, he acknowledged that Vietnamese businesses would be under more pressure, as the higher tariffs could reduce demand, forcing companies to re-evaluate their pricing strategies.
The Vietnam Commodity Exchange deputy general director Duong Duc Quang advised exporters not to panic but rather to adapt proactively.
He emphasised the importance of enhancing internal capabilities and improving production efficiency while also seeking out new markets to reduce reliance on the United States.
Investing in advanced technology to produce higher-value aluminium products and working closely with government agencies to navigate trade policies could also help mitigate the impact of the tariffs, he said.
Quang also recommended that companies diversify their export markets by focusing on countries with free trade agreements with Vietnam to avoid excessive reliance on the United States.
Thinh agreed, underscoring the need to boost domestic consumption.
He argued that the steel and aluminium sectors should develop the domestic market to reduce reliance on major export destinations like the United States.
Optimising logistics and lowering production costs would further improve competitiveness.
While the 25% tariff will pose difficulties for Vietnam’s aluminium and steel exporters, experts agree that it is not an insurmountable barrier.
The tariff applies broadly to all exporting countries, meaning that Vietnam remains competitive on a global scale.
US Ambassador to Vietnam Marc Knapper reaffirmed that the United States continued to value its trade relationship with Vietnam.
He highlighted that 2025 marked the 30th anniversary of diplomatic relations between the two nations and expressed optimism about expanding economic cooperation. — Viet Nam News/ANN
