Vietnam's aluminum and steel industry is confronting a major hurdle as the U.S. officially enforces a 25% import tariff on these products. This decision comes amidst heightened trade protectionism by the U.S., directly threatening Vietnam's export turnover worth billions of USD. With the U.S. being Vietnam's third-largest steel export market, this new tariff will make it difficult for businesses to maintain their market share.

Current State of Vietnam’s Aluminum and Steel Industry

Steel Industry Overview

Over the past decade, Vietnam's steel industry has achieved remarkable growth, becoming one of the world’s leading steel exporters. In 2024, Vietnam ranked 8th in steel exports to the U.S., with $938 million in revenue, marking a 159% increase compared to the previous year but accounting for only 3.1% of total U.S. steel imports.

Mr. Dinh Quoc Thai, Secretary General of the Vietnam Steel Association (VSA), stated: "Since 2018, most Vietnamese steel exported to the U.S. has been subject to a 25% tariff. However, this time, there are no exceptions for any country."

The steel industry faces several challenges:

Dependence on imported raw materials: 70% of steel production materials are imported, primarily from China and Japan.
Competitive pressure: Cheap Chinese steel floods the domestic market in large volumes.
Outdated technology: Many enterprises still use old technologies to produce low-value products.

Aluminum Industry Overview

For aluminum, the tariff increase from 10% (2018) to 25% is a significant shock as the U.S. accounts for 60% of Vietnam’s total aluminum export turnover ($479 million). A representative from the Vietnam Aluminum Association (VAA) shared: "Since February 2025, many orders have been suspended as businesses await an assessment of the actual impact of this new tax policy."

Opportunities and Challenges for Aluminum and Steel Amidst U.S. Tariffs

Vietnam's aluminum sector faces significant challenges with tariffs rising from 10% to 25%, threatening $479 million in export turnover (60% of total aluminum exports). Many orders have dropped sharply since February 2025 due to uncertainty, compounded by global raw material price fluctuations that complicate production planning.

However, these uniform tariffs also present opportunities:

Vietnam retains a competitive edge over China (10% tariff) and Russia (200%) while avoiding discriminatory treatment.
The escalating U.S.-China trade tensions may create gaps for Vietnamese aluminum products to expand market share.

The biggest risk lies in potential fraudulent Chinese-origin goods passing through Vietnam to evade tariffs, which could lead to trade defense lawsuits against local businesses. Domestically, excess capacity in aluminum plants will intensify competition as firms pivot to local markets already flooded with cheap Chinese imports.

Source:: Saigon Times

Solutions for Vietnamese Enterprises

To overcome these challenges, Vietnamese aluminum and steel enterprises should adopt the following strategies:

Impact Assessment: Conduct thorough analyses of how tariff policies affect production and business activities, identifying vulnerable products and markets.
Production Restructuring: Focus on manufacturing high-value-added products that meet international quality standards.
Market Diversification: Expand exports to potential regions such as ASEAN, EU, Japan, and South Korea.
Enhancing Competitiveness: Invest in advanced technology to boost labor productivity and reduce production costs.
Policy Advocacy: Collaborate with industry associations and government agencies to seek supportive policies from authorities.
Origin Control: Strictly manage raw material origins to avoid legal risks related to trade fraud.

Source:: PLO

Reactions from Other Nations

Following the imposition of a 25% tariff on imported aluminum and steel, several countries have responded strongly:

Canada, the largest metal exporter to the U.S., imposed reciprocal tariffs of 25% on $20 billion worth of American goods starting March 13, adding to existing tariffs on $30 billion worth of goods.
The EU announced retaliatory tariffs on $28 billion worth of U.S. goods including bourbon whiskey, motorcycles, and yachts effective early April.
Mexico plans its response by April 2 while Australia criticized the move as unjustified but refrained from imposing counter-tariffs.

While these tariffs aim to level the playing field for domestic industries in Washington, they risk driving up prices for consumer and industrial goods.

The U.S.’s 25% tariff barrier poses significant challenges but also opens doors for transformation within Vietnam’s aluminum and steel industries. This is an opportune moment for enterprises to restructure operations, enhance competitiveness, diversify markets, and affirm their position in global trade.

>> Learn more: Thích ứng VUCA: Linh hoạt vượt thử thách cùng Tân Thanh Container

--------------------------------

Tan Thanh Mechanical and commercial joint stock company
Address: No. 14 Street No.15, Quarter No.4 (KP4), Linh Trung Ward, Thu Duc City, Ho Chi Minh City
Phone: +84 968 039 939
Email: info@tanthanhcontainer.com
Website: tanthanhcontainer.com

Vietnam’s Aluminum and Steel Industry Faces a 25% Tariff Barrier from the U.S.