{"id":54649,"date":"2025-02-12T06:05:56","date_gmt":"2025-02-12T14:05:56","guid":{"rendered":"https:\/\/vietvalley.com\/explained-how-us-tariffs-affect-vietnams-economy\/"},"modified":"2025-02-12T06:05:56","modified_gmt":"2025-02-12T14:05:56","slug":"explained-how-us-tariffs-affect-vietnams-economy","status":"publish","type":"post","link":"https:\/\/vietvalley.com\/en\/explained-how-us-tariffs-affect-vietnams-economy\/","title":{"rendered":"EXPLAINED: How US tariffs affect Vietnam\u2019s economy"},"content":{"rendered":"

Read more on this topic in Vietnamese<\/u><\/a><\/p>\n

Vietnam\u2019s steel industry faces a double threat from the U.S. after President Donald Trump signed an executive order<\/u><\/a> to impose a 25% tax on all steel imports from March 4. It was already being investigated by the U.S. Commerce Department for illegal subsidies and dumping. Vietnam\u2019s aluminum exporters face a similar surcharge.<\/p>\n

Vietnam is the fifth-largest exporter of steel to the U.S., which is Vietnam\u2019s number three market.<\/p>\n

It isn\u2019t the first time Trump has imposed such sanctions. In 2018, he imposed a 25% tariff on steel and 10% on aluminum imported from Vietnam and several other countries.<\/p>\n

Impact on Vietnam<\/b><\/h3>\n

On Feb. 11, Vietnam\u2019s Doanh Nghiep & Tiep Thi<\/i> newspaper quoted Do Ngoc Hung, a commercial counselor and head of the Vietnam Trade Office in the U.S. as saying Vietnamese enterprises still had many opportunities to export to the U.S. because its steel and aluminum manufacturers cannot immediately meet domestic demand. However, profit margins would narrow due to higher import charges.<\/p>\n

The amount of Vietnamese steel exported to the U.S. in 2024 reached nearly 1.7 million tons, worth US$1.3 billion, an increase of over 50% compared with 2023 in terms of both volume and turnover, according to the Vietnam Steel Association as cited on the VietnamBiz<\/u><\/i><\/a> news site.<\/p>\n

Meanwhile, data from the Customs Department<\/u><\/a> show that last year, the import value of iron and steel from other countries to Vietnam reached $19.07 billion, of which 63% was imported from China, worth $12.03 billion.<\/p>\n

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Radio Free Asia emailed the Ministry of Foreign Affairs and the Vietnamese Trade Office in the U.S. to ask about how Trump\u2019s executive order affects Vietnam\u2019s exports but did not receive a response.<\/p>\n

RFA also asked Vietnamese steel companies Hoa Phat, Hoa Sen and Pomina for comment but they did not reply.<\/p>\n

Effect on re-exporters<\/b><\/p>\n

Norway-based economist Nguyen Huy Vu told RFA the 25% U.S. tariff would directly affect manufacturers in Vietnam and Chinese companies that use Vietnam to export to the U.S. to avoid existing tariffs.<\/p>\n

Vu said that the U.S. government\u2019s new tax on aluminum and steel from other countries would cause difficulties for Vietnamese businesses. <\/p>\n

\u201cTrump\u2019s imposition of such tariffs will force Vietnamese businesses to reconsider their business strategies. Certainly, businesses that want to build more steel factories will have to rethink,\u201d he said.<\/p>\n

\u201cIt has its good and bad points. It will affect the big Vietnamese enterprises like Hoa Phat but they will have to reshape their business strategy. Instead of exporting steel, they have to switch to increasing the technology for producing steel and have to switch to producing more valuable products.\u201d <\/p>\n

\"A
A man polishes steel beams at a steel factory in Que Vo district, outside Hanoi May 20, 2011.<\/figcaption>(Nguyen Huy Kham\/Reuters)<\/small><\/figure>\n

The Nhan Dan<\/u><\/i><\/a> newspaper reported on Feb. 8 that the Ministry of Transport had submitted to the government a proposal to invest in the construction of a new Lao Cai-Hanoi-Hai Phong railway line worth $8.3 billion to connect Hai Phong port with China to implement China\u2019s \u201cBelt and Road\u201d initiative and Vietnam\u2019s \u201cTwo Corridors, One Belt\u201d cooperation plan.<\/p>\n

According to Vu, this railway line will likely serve heavy industries including steel imported directly from China and then exported.<\/p>\n

Given this new executive order, the Vietnamese government may have to accept the ministry\u2019s proposal for the railway, he said.<\/p>\n

Possible price cuts<\/b><\/p>\n

Vu said U.S. importers may ask Vietnamese steelmakers to cut prices by up to 20% so they can still make a profit after the 25% tariffs kick in, adding that manufacturers in the United States may keep their prices the same or increase them only slightly.<\/p>\n

\u201cIt will lead to Vietnamese companies being greatly affected and Chinese companies will not want to invest in Vietnam anymore. Surely Vietnam\u2019s economy will face many difficulties in the coming days,\u201d Vu said.<\/p>\n

\"A
A man works at a steel factory in Que Vo district, outside Hanoi May 20, 2011.<\/figcaption>(Nguyen Huy Kham\/Reuters)<\/small><\/figure>\n

Vietnam\u2019s Ministry of Construction estimates the total annual revenue value of the construction materials, cement, and steel industries at nearly $47 billion, accounting for about 11% of Vietnam\u2019s gross domestic product, or GDP, Vietnamplus<\/u><\/i><\/a> reported.<\/p>\n

Anti-dumping investigation<\/b><\/p>\n

In September 2024, Vietnam\u2019s Department of Trade Defense at the Ministry of Industry and Trade<\/u><\/a> said that the U.S. Department of Commerce was investigating Vietnam, along with other countries, for dumping and subsidies, with the dumping accusation having a margin of up to 160%, the highest in the world.<\/p>\n

The investigation period is 2023 and the damage assessment period is from 2021 to 2023.<\/p>\n

Translated by RFA Vietnamese. Edited by Mike Firn.<\/b><\/i><\/p>\n

\u00a0<\/p>\n

Tin t\u1eeb RFA Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"

Read more on this topic in Vietnamese Vietnam\u2019s steel industry faces a double threat from the U.S. after President Donald Trump signed an executive order to impose a 25% tax on all steel imports from March 4. It was already being investigated by the U.S. Commerce Department for illegal subsidies and dumping. Vietnam\u2019s aluminum exporters …<\/p>","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[239],"tags":[246,251],"class_list":["post-54649","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-vietnam","tag-english","tag-rfa"],"_links":{"self":[{"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/posts\/54649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/comments?post=54649"}],"version-history":[{"count":0,"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/posts\/54649\/revisions"}],"wp:attachment":[{"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/media?parent=54649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/categories?post=54649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vietvalley.com\/en\/wp-json\/wp\/v2\/tags?post=54649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}