Amid a tariff war triggered by President Donald Trump, export countries worldwide are struggling, and the Vietnamese steel industry is facing an unprecedented crisis. Vietnamese authorities and the steel industry are trying to find a new survival strategy while blocking the influx of low-priced steel from China.
On the 23rd (local time), Bloomberg reported that Vietnam is implementing various measures to protect its steel industry. The Vietnamese Ministry of Industry and Trade began imposing temporary tariffs of up to 37.13% on galvanized steel plates imported from South Korea and China starting on the 16th. Earlier in March, tariffs of up to 27.83% were imposed on hot-rolled coil steel products from China.
These measures are a response to China oversupplying low-priced steel to the global market to offset a domestic construction downturn. With the Trump administration advocating for protectionism and starting to impose punitive tariffs on manufacturing nations closely tied to China, Vietnam appears to have chosen the difficult strategy of imposing tariffs to protect its domestic industry.
According to Bloomberg, Vietnam, boasting a high economic growth rate, has rapidly developed its steel industry during the expansion of factories, highways, and airports as part of its manufacturing and social infrastructure. The strategy of importing large quantities of low-priced steel from China, often referred to as the "backyard of China," and using it in steel plate production is the secret to its success. Last year, Vietnam's imports of Chinese steel reached record highs, marking an increase of about 500% compared to 2020.
However, faced with the double whammy of China's volume offensive and high tariffs imposed by the United States, Vietnam is taking action against Chinese steel imports while striving to improve relations with the U.S. This is an unusual move for Vietnam, which maintains friendly relations with the U.S., China, and Russia, following the principle of "bamboo diplomacy."
On the 2nd, after being slapped with high tariffs of 46%, Vietnam was the first to contact the White House, proposing the elimination of tariffs on U.S. products. On the 15th, it announced a reinforcement of measures to clamp down on circumstantial exports of Chinese products to the U.S. through Vietnam, actively joining the U.S. pressure campaign against China.
However, China's courting of Vietnam is also significant. On the 14th, Chinese President Xi Jinping made a state visit to Vietnam and met with Communist Party General Secretary Nguyen Phu Trong, emphasizing the need to build an anti-U.S. alliance. During the meeting, Xi stressed that "the two countries, as beneficiaries of economic globalization, should enhance strategic restraint and maintain the stability of the free trade system and supply chains."
In response, the Vietnamese steel industry is seeking new strategies to overcome the crisis, such as reducing production expenses and diversifying export markets. Hoa Phat Group JSC, the largest steel company in Vietnam, is expanding its production facilities this year to reduce average production expenses by 11% compared to the previous year, thereby enhancing its competitiveness. The state-owned steel company VNSteel is widening its sales channels to overseas markets, including Indonesia.
Thomas Gutierrez, an analyst at steel information company Kallanish Commodities Ltd., noted that "as tariff measures are expanding, market development is no longer optional but essential," predicting that "more Vietnamese steel companies will turn their attention to markets in Europe and Latin America."