In your opinion, how will US President Donald Trump impose a 25% tax on all steel and aluminum imports into this country affect the export of steel and aluminum in Vietnam?
- The US is a large and important export market for Vietnamese steel enterprises. Therefore, Mr. Trump's imposition of a 25% tax on all steel and aluminum imports into the US will certainly affect Vietnam's steel exports in the coming time.
However, at present, this policy does not greatly affect Vietnam's steel and aluminum exports. Because from 2018 to now, Vietnamese steel has been subject to a duty rate of 25% and aluminum is also subject to a duty rate of 10% when imported to the US. Due to high taxes, although Vietnam is the 5th largest steel supplier to the US, it only accounts for a modest proportion of about 3-5% of the total import value of the country.
From a broader perspective, Vietnam's steel and aluminum exports will also be affected by the global chain effect. When countries are subject to high taxes, they will shift to other markets, including Vietnam. This causes fierce competition for domestic enterprises and many countries will introduce protection policies using trade or technical fences.
I think the immediate impact of this policy is on price movements in the world metal market.
Sir, what scenarios and solutions should Vietnam have to flexibly adapt to ensure steel and aluminum exports?
- There are always risks, if positive, this could be our opportunity. We predict that there may be 3 scenarios for the upcoming long term.
Optimal scenario: The US will consider some countries that will enjoy tax exemptions to ensure domestic steel supply as at the time of 2018, Vietnam was on this list. Vietnam is currently a comprehensive strategic partner of the US, so there is a basis for negotiating this condition. Australia has now negotiated and received Trump's promises of tax exemptions and reductions, although Trump has said he is "no exception". In this optimal scenario, Vietnamese steel will have the opportunity to increase export turnover to the US. However, I rate this scenario at 50/50.
Scenario 2: Vietnam is subject to taxes like other countries.
In fact, Vietnam is still subject to a 25% tax rate, so this scenario will not affect it too much.However, to prevent risks and adapt flexibly, Vietnamese steel exporting enterprises should proactively seek and expand markets to other regions such as the Middle East, Korea...
Worst scenario: Vietnamese steel must pay a 25% tax rate, undergo investigations of origin and undergo anti-dumping orders.Businesses should proactively prepare documents and procedures related to goods, to prevent the worst case scenario is the US investigating anti-dumping taxes.Coordinate with the Ministry of Industry and Trade to monitor commercial defense and business protection lawsuits in Vietnam.
What recommendations do you have for domestic steel and aluminum production and export enterprises?
- First, businesses must be proactive and coordinate with state management agencies, Vietnamese foreign affairs agencies, embassies, international organizations, and importers to grasp the situation and information and developments of the market.
Enterprises should increase internal strength by innovating production methods, processes... to produce high-end products, saving costs and increasing profit margins such as improving product quality by investing in environmentally friendly production technology and reducing emissions to meet the standards of developed markets. Update production lines, switch to high-quality aluminum steel product lines.
We can take advantage of the current time to accumulate input materials.
Thank you!
