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(Published on VIR) Starting March 4, all aluminum and steel imports into the U.S. will be subject to a 25% tariff. This sudden change presents significant challenges for Vietnamese exporters. As Vietnam ranks fourth among the largest steel suppliers to the U.S., this policy shift could have severe direct and indirect consequences for the country’s steel and aluminum industries.
The U.S. administration states that the law’s extensive authority allows the president to rapidly implement tariffs with minimal investigation or oversight to react immediately to imminent threats. With few procedural limits around the use of the Emergency Economic Powers Act, in place since 1977, President Donald Trump can declare, in this case, a tariff increase as part of a national emergency.
In addition, the first Trump administration used Section 232 of the Trade Expansion Act as a basis to impose tariffs on such products, many of which remain in place today. Section 232 authorizes tariffs after an investigation by the U.S. Department of Commerce finds that imports threaten to impair national security.
According to data from the former General Department of Customs, in 2024, Vietnam exported $112.5 billion to the U.S. and imported $10.5 billion. In January 2024, the former General Statistics Office data showed that total trade turnover between Vietnam and the U.S. reached $11.1 billion, remaining relatively unchanged from the same period last year. This stability suggests that the proportion of export-import turnover between the two countries has been maintained.
Regarding Vietnam’s steel exports to the U.S., U.S. Customs data indicated that in 2024, Vietnam exported approximately $983 million worth of steel and steel products to the U.S. market. For aluminum products, U.S. Customs data also revealed that in 2024, Vietnam exported approximately $479 million worth of aluminum and aluminum products to the U.S. market.
Due to the large volume of steel and aluminum exports to the U.S., Vietnamese manufacturing-exporting businesses are frequently subjected to U.S. trade remedy investigations. Currently, tariffs of 10% on aluminum and 25% on steel products under Section 232 have been in place since 2018 for most countries.
To date, the U.S. has initiated more than 34 trade remedy investigations into Vietnam’s steel exports, accounting for over half of all trade remedy cases involving Vietnam. For aluminum products, there have been two investigation cases.
According to recent statistics compiled by the American Chamber of Commerce in Vietnam:
- 81% of American businesses operating in Vietnam are concerned about the possibility of U.S. tariffs under a second Trump administration.
- 92% of U.S. manufacturers in Vietnam expressed concerns that tariffs could disrupt supply chains and negatively impact competitiveness.
- Over 85% of surveyed businesses believe tariffs will reduce trade volume, disrupt long-term partnerships, and negatively affect Vietnam’s economy.
These concerns are well-founded given that President Trump has explicitly reaffirmed his “America First” policy for his second term. However, whether to view this matter as a risk or an opportunity remains up to each Vietnamese business.
Firstly, with the increase in tariffs, Vietnamese businesses will have to compete with little to no advantages over steel and aluminum manufacturers from other countries. This double-edged sword may reduce profits in the short term but also presents an opportunity to streamline operations.
Secondly, the U.S. may tighten inspections on product origins and verify the legality of raw materials. If businesses fail to provide sufficient proof of lawful sourcing, they risk being subjected to additional tariffs, specifically anti-circumvention duties on goods suspected of originating from China, which remains in trade tension with the U.S.
On the other hand, given Vietnam’s history with U.S. trade remedy investigations, including anti-dumping, anti-subsidy, and anti-circumvention cases, Vietnamese businesses should already be familiar with such tariff increases. This prior experience provides an advantage over businesses from other countries.
Thirdly, Contract and Supply Chain issues pose further challenges. US partners may suspend or cancel orders due to regulatory concerns. In extreme cases, measures similar to U.S.-issued sanctions or retaliatory actions from other trade partners may be applied. These could disrupt supply chains and force businesses to seek alternative markets.
If higher-than-expected tariffs are imposed, disputes over contract terms could arise, leading to financial and legal consequences for Vietnamese exporters. This is why businesses must work closely with legal counsel throughout their operations to mitigate risks.
Despite the difficulties and uncertainties ahead, confidence in the Vietnamese market remains strong:
- 94% of businesses and 98% of manufacturers specifically still believe in Vietnam’s potential due to its developed infrastructure, skilled workforce, and strategic location.
- Vietnam still has substantial opportunities to continue exporting, as U.S. steel and aluminum manufacturers have yet to fully meet domestic demand, creating room for outstanding businesses to step in.
However, profit margins for exporters may decline in the near future.
Nonetheless, after an initial period of adjustment and adaptation, Vietnamese businesses will gain deeper access to the U.S. supply chain, especially as products increasingly meet origin requirements while maintaining high quality and competitive pricing.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient, and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is a top-tier Vietnamese law firm that provides in-depth legal advice in Vietnam and internationally. If you need any advice, don’t hesitate to get in touch with us for further information or collaboration.
