New US tariffs to benefit Vietnam steel exporters, but aluminum companies under pressure

The aluminum tariffs, scheduled to take effect in early March, will increase the existing 10% tariff on Vietnamese aluminum by 15 percentage points.

Vietnam’s steel exports are likely to benefit since they have already been subject to a 25% tariff since 2018, while Trump’s latest 25% tariffs will now also apply to major steel exporters such as Canada, Mexico and Brazil, which were previously exempt from high tariffs.

Hoa Phat Group steel inside a factory. Photo courtesy of Hoa Phat Group

The tax hike is expected to reduce Vietnam’s aluminum exports to the U.S., which currently account for 60% of all exports, according to the Vietnam Aluminum Profile Association.

It said the worst affected would be foreign-invested manufacturers since they are the primary exporters.

Vietnamese steel companies might however face indirect challenges as major competitors such as Canada, Mexico and Brazil could redirect their exports to other markets.

"If they cannot sell in the U.S., they might shift to Europe, Japan, South Korea, or even Vietnam," Nghiem Xuan Da, chairman of the Vietnam Steel Association, said.

Do Ngoc Hung, head of Vietnam’s trade office in the U.S., said major global steel producers might also focus more on selling in their own countries, further limiting opportunities for Vietnamese exporters.

Vietnam was the fifth largest steel supplier to the U.S. in 2024 with $1.7 billion worth of shipments, according to the American Iron and Steel Institute.

"With no special advantages for others, Vietnamese steel companies will not face tariff and quota disadvantages compared to other exporters," a business executive said.

The U.S. remains highly dependent on imports, with 12-15% of its steel and 40-45% of its aluminum sourced from foreign suppliers.

Businesses looking to enter the U.S. market should seek professional consulting services to mitigate risks, particularly during periods of market uncertainty, Nguyen Manh Quyen, head of Vietnam’s Trade Office in Houston, said.

The Vietnam Aluminum Profile Association recommended that producers should develop higher-value products and negotiate with U.S. buyers to ensure sales stability.

In the long run businesses should invest in technology to reduce costs and better absorb tariff risks, Da added.