President Trump's tough tax decree
US President Donald Trump has signed an executive order imposing a 25% tariff on all steel and aluminium imported into the US. The aluminium import tariff will increase from the 10% imposed in 2018 to 25%.
The tariffs, which are higher than the current tariffs on metals imported into the US, mark another major escalation in Mr Trump’s trade policy overhaul. Countries that are currently exempt from the steel and aluminium tariffs will no longer be eligible for them.
The new tariffs will take effect on March 4. Mr. Trump pledged that the effort would help boost manufacturing and bring more jobs back to the US, while warning that tariffs could be raised even higher.
US President Donald Trump holds an executive order to raise tariffs on aluminum and steel (Photo: Reuters).
President Trump also added new regulations, requiring imported steel to be "melted and cast" in North America to limit steel and aluminum from China into the US.
White House Trade Adviser Peter Navarro insisted that this was not a “purely commercial” move. He explained that this effort would ensure that the US no longer had to rely on other countries for important industries such as aluminum and steel; end the dumping of cheap goods into the US from foreign countries, promote domestic production and protect industries that are key to national security.
Which country exports the most aluminum and steel to the US?
The US economy today is no longer as focused on manufacturing as it was in the past, but it still consumes tens of millions of tons of steel every year. Therefore, the world's number one superpower still regularly imports steel every year.
Imported steel is used in industries such as autos, aerospace, oil and construction. Tariffs will increase production costs in these industries because imported metals will become more expensive. At the same time, US steelmakers will likely raise their prices as competition from cheaper imports eases, according to CNN .
According to the American Iron and Steel Institute (AISI), Canada is the largest supplier of steel to the US in 2024. Canada exported 5.95 million tons of steel to the US, down 5% from the previous year. It was followed by Brazil, Mexico and South Korea.
Notably, Vietnam is also in the top 5 steel suppliers to the US in 2024, and recorded the largest growth among the markets.
Specifically, Vietnam had the largest increase among all steel products imported into the US last year, with a volume increase of 143%, equivalent to 1.3 million tons. This increase means that Vietnam has risen from the 9th largest source of steel imports to the US to the 5th position.
In addition, the US currently depends on imported aluminum, mainly from Canada, the United Arab Emirates (UAE) and China, to meet most of its production needs, according to Bloomberg .
Official US data shows that Canada is also the country's largest aluminum supplier, accounting for 56% and 58% of aluminum imports into the US in 2023 and 2024, respectively.
In 2024, the next four countries supplying the most aluminum to the US will be the UAE, China, South Korea and Bahrain. Experts predict that Canada will be at greatest risk of being affected when the new US tariffs on metals are implemented.
During his first term, Mr. Trump imposed a 25% tariff on imported steel and 10% on imported aluminum, but later exempted some partners including Canada, Mexico and Brazil.
Will Vietnam be affected?
Speaking to Dan Tri reporter, Mr. Do Ngoc Hung - Trade Counselor, Head of Vietnam Trade Office (Ministry of Industry and Trade) in the US - said that since 2018, most of Vietnam's steel exports to the US have been subject to a 25% tax on steel and 10% on aluminum.
"However, during Mr. Trump's first term, a number of major countries such as Canada, Mexico, Brazil, Japan, South Korea... were exempted from this tax, creating unfairness in the competitive environment for non-exempt exporters, including Vietnam," Mr. Hung acknowledged.
According to him, Vietnam has not been on the exemption list since 2018, so steel exported from Vietnam to the US will continue to be subject to a 25% tax rate in the coming period.
The Head of the Vietnam Trade Office in the US assessed that the US will apply an additional 25% tax on imported aluminum and steel, which will have a negative impact on countries exporting aluminum and steel to the US in the coming time. Currently, the US depends on the demand for imported steel (accounting for 12-15%) and aluminum (accounting for 40-45%).
"However, if the US applies it to all imported goods, Vietnam will still have many opportunities to continue exporting because in reality, the production capacity of US steel and aluminum manufacturers cannot immediately meet domestic demand. However, the profit margin of exporting enterprises will decrease," Mr. Hung said.
According to this person, the difficulty in exporting to the US will also affect the supply chain, steel and aluminum from countries that have difficulty exporting to the US will find ways to export to other countries, including Vietnam.
Steel coils at the Hyundai Steel plant in South Korea (Photo: Reuters).
In addition, imposing high tariffs on exports will cause steel companies to return to the domestic market and cause countries to increase protectionism on steel and aluminum. This will make it difficult for steel exporting countries like Vietnam to compete in other markets, outside the US.
In addition, Mr. Hung believes that applying this common tax rate can create opportunities for Vietnamese steel enterprises. When there is no longer a distinction between countries exporting to the US, Vietnamese companies will no longer have to face price competition from countries with lower tax rates such as Canada, Mexico or Brazil in the past.
"This helps Vietnamese businesses reduce price competition pressure if they can take advantage of comparative advantages. However, any adjustment in tax policy will also impact the export market," he said.
Therefore, the head of the Vietnam Trade Office in the US said that Vietnamese enterprises need to assess the situation to have appropriate business strategies, expand exports to markets that have FTAs with Vietnam, and avoid dependence on one market.
"Comply with US regulations on origin and always be ready to fully participate in the explanation process of US investigation agencies on Trade Defense cases. Closely coordinate with the Ministry of Industry and Trade (Trade Defense Department) and diplomatic missions abroad to closely monitor the situation to have appropriate responses," Mr. Hung noted.
From a business perspective, Mr. Nghiem Xuan Da, Chairman of the Vietnam Steel Association, said that in fact, since 2018, Vietnamese steel and aluminum exported to the US have been subject to a 25% tax and 10% tax on aluminum. "Therefore, businesses exporting these items to the US will not be affected much after Mr. Trump's new announcement," Mr. Da said.
The leader of the Vietnam Steel Association said that in the short term, this tax will make it difficult for Vietnamese steel to compete in other markets, besides the US. "In the coming time, the Association will have a specific assessment of the impact of the US imposing import tax on this item," Mr. Da shared.
According to some experts, Mr. Trump's decision to impose tariffs without excluding any country will open up new opportunities, creating a fair competitive environment for all steel exporters to the US. "Vietnamese steel companies will no longer face unfair competition in terms of tariff differences and tariff quotas from countries such as Canada, Mexico, and Brazil," a steel industry expert commented.
According to data from the Vietnam Steel Association (VSA), in 2024, Vietnam exported about 12.62 million tons of steel, an increase of 13.47% over the same period in 2023. The export value reached 9.08 billion USD, an increase of 8.78% over the same period in 2023.
Of which, the amount of steel exported to the US last year reached nearly 1.7 million tons, worth 1.3 billion USD. The proportion of steel exports to the US from Vietnam increased to 13%, an increase of more than 3% compared to 2023.
Currently, the US is the third largest market in Vietnam's total steel exports, after the EU (23%) and ASEAN (26%). Other markets such as India account for 6%, Taiwan 4%, Brazil 3%, Turkey 3%...
Previously, at the regular press conference of the Ministry of Industry and Trade held in January, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department, said that the US is currently Vietnam's largest export market. In 2024, Vietnam will also be the 8th largest partner of the US, accounting for 4.13% of total export turnover to this market.
"Previously, the impact of Vietnamese goods from US market tariffs was not large. This year, the Ministry of Industry and Trade has outlined two scenarios. The optimistic scenario is that the US maintains its current tax policy on Vietnamese goods. In the trend of shifting supply chains, Vietnam can completely welcome investment flows to increase exports," said Mr. Hai.
In the second scenario, the leader of the Import-Export Department said that if the impact of tariffs is more severe and tighter, it could affect the global economy, causing Vietnam's goods exports to be affected to some extent.
"The Chinese market - a major partner of the US, if facing difficulties due to tariffs, will also create pressure in the US and pressure on our country. For this scenario, the Ministry of Industry and Trade will consider reporting to the Government to support manufacturing and export enterprises in diversifying markets in the coming time," Mr. Hai said.
Dantri.com.vn
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