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On March 19, the European Commission (EC) announced the Action Plan on Steel and Metals to enhance competitiveness and protect the future of the steel and metals industry in the EU. However, the new policies in this plan will have a significant impact on Vietnamese steel manufacturing and exporting enterprises.
Key Policy Changes
Expansion of CBAM to Downstream Steel and Aluminum Products
The EC will conduct a comprehensive assessment in Q4/2025, along with an anti-circumvention strategy, which may lead to an expansion of CBAM to downstream products that heavily use steel and aluminum.
Tightening of Steel Safeguard Measures
- Reduction of import volume subject to safeguard measures by 15%.
- Lowering of the liberalization rate from 1% to 0.1%.
- Elimination of transition mechanisms and restrictions on access to remaining quotas.
Replacement of Short-Term Safeguards with a Long-Term Mechanism
From July 1, 2026, the EU will apply long-term safeguard measures to address global overcapacity and protect domestic production.
Strengthening of Trade remedy Investigations
- The EC will initiate an investigation on aluminum, considering safeguard measures similar to those applied to steel.
- The “melting and casting” rule will help determine the origin of metals to prevent circumvention of trade remedy measures.
Promotion of Circularity and Decarbonization
- The EU may set targets for the use of recycled steel and aluminum in the automotive and construction industries.
- By Q3/2025, the EU is expected to introduce measures to ensure the supply of metal scrap.
Recommendations for Vietnamese Enterprises
Since mid-2023, Vietnamese steel exports to the EU have faced numerous challenges, including trade remedy measures and the Carbon Border Adjustment Mechanism (CBAM). The EU continues to enforce trade remedy measures on imported steel until June 30, 2024. To qualify for safeguard duty exemption, Vietnam must maintain its export market share below 3% of the EU’s total steel imports for each product category.
In 2024, Vietnam’s steel exports to Europe have achieved notable results. According to the Vietnam Steel Association (VSA), in the first five months of 2024, the European Union (EU) became Vietnam’s largest steel export market, accounting for approximately 26% of total export volume, surpassing ASEAN at 25.75%.
Given these changes, Vietnamese steel manufacturers and exporters should:
• Closely monitor EU policy developments.
• Review production processes to comply with CBAM regulations.
• Develop strategies to cope with safeguard and anti-circumvention measures.
• Enhance circularity and reduce carbon emissions in production.
These changes require Vietnamese enterprises to quickly adapt to sustain and expand their exports to the EU.
To protect their legitimate interests, manufacturers and exporters should familiarize themselves with the procedure and actively contact Vietnamese law firms specializing in anti-dumping and trade remedy for timely assistance.
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 the top-tier Vietnam law firm for Anti-dumping & countervailing. If you need any advice, please contact us for further information or collaboration.
