Vietnam has so far been spared tariffs by the Trump administration despite a large foreign trade deficit; so goes the assumption…
1. This is not entirely true as to some aspects. Trump imposes worldwide 25 percent steel and aluminum tariffs. While several countries received exemptions from the 2018 steel and aluminum tariffs, Vietnam was never granted one. As a result, Vietnamese steel and aluminum exports were already subject to a 25 percent and 10 percent tariff, respectively. From March 12, the aluminum tariff will increase to 25 percent, while the steel tariff will remain unchanged.
· Vietnam was the US’s fifth largest source of steel in 2024, rising from ninth place in 2023. In 2024, US imports of steel mill products for domestic consumption from Vietnam skyrocketed by 143.4 percent on the previous year to reach 1.2 million metric tons, valued at US$1.13 billion, per data from the ITA. Almost 75 percent was composed of flat carbon and alloy steel. Vietnam also exports a smaller amount of aluminum to the US. In 2024, Vietnam’s total exports of aluminum products for domestic consumption to the US dropped by 1.7 percent from 2023 to 35,593 metric tons, valued at US$142.9 million.
It is important to note that Vietnam’s steel and aluminum exports to the US were already subject to tariffs of 25 percent and 10 percent, respectively. In 2018, during Trump’s first term, the US imposed Section 232 tariffs on steel and aluminum imports from all countries, citing national security concerns. While some countries later received exemptions, tariffs on many Vietnamese steel products have remained in place ever since.
• As a result, the impact on Vietnam’s steel exports to the US is likely to be limited, especially given that exports have continued to grow rapidly despite the tariff. The tariff hike could even benefit Vietnamese exporters by leveling the playing field with other countries, which will now face the same 25 percent tariff. Notably, major US steel suppliers such as Canada and Mexico, which were previously granted exemptions, will now be subject to the tariff.
• By contrast, Vietnamese aluminum exports to the US are more vulnerable. The tariff rate will increase by 15 percentage points, posing a greater challenge—especially since Vietnam exports smaller quantities of aluminum, and shipments had already declined in 2024 compared to the previous year, even before the tariff increase.
• However, the global steel and aluminum markets are likely to experience significant shifts due to these tariffs. If the US achieves Trump’s stated goal of expanding its domestic steel and aluminum industries, major US suppliers will seek new markets for their products, intensifying competition for Vietnamese exports.
2. Generally, as the Deputy Minister of Industry and Trade of Vietnam recently confirmed, Trump’s recent tariffs on imports from major trading partners will alter the flow of global trade, and Vietnam will not be exempt from the impact but Vietnam expects no major damage as the government is closely monitoring the global development for the following reasons:
(i) Vietnam has conveyed messages to the U.S. about Vietnam’s desire to maintain and build a harmonious, sustainable, and mutually beneficial economic and trade relationship;
(ii) Vietnam has no policies that seek to harm U.S. workers and its national security;
(iii) Vietnamese goods exported to the U.S. mainly compete with third countries, not directly with U.S. businesses in their domestic market. Vietnam exports provide U.S. consumers with access to affordable goods.
(iv) Vietnam pursues a free trade policy, with minimal tariff disparities for U.S. goods. In the future, this gap may narrow further as Vietnam aims to reduce Most Favored Nation tariffs on various products.
(v) The two countries have established a policy dialogue mechanism under the Vietnam–U.S. Trade and Investment Framework Agreement. Additionally, the government has proactively tasked ministries and sectors to review obstacles and develop solutions to address U.S. concerns.
(vi) Vietnam will facilitate U.S. investors’ participation in the development of key industries in Vietnam. Priority areas include major energy projects such as new energy, hydrogen, and nuclear power. This also lays the groundwork for increased imports of liquefied gas, fuels, machinery, equipment, and technology from the U.S.
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Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.