According to the updated report on US Import Tariffs on Steel and Aluminum and Potential Impact by SSI Securities Corporation, the above move is an extension of the Section 232 tax issued in 2018 by US President Donald Trump.
The original tariff set a flat 25 percent rate on steel imports but included exemptions for a number of countries, including Canada, Mexico, Brazil, South Korea, and the United Kingdom. The new tariff maintains the Section 232 tariff and eliminates all exemptions. The new law will take effect March 4, 2025.
SSI experts analyzed that for Vietnam, steel imports into the US have been taxed at 25% since 2018 under Section 232, so Vietnam's steel is not affected by this tax increase. Therefore, there is little impact on the Vietnamese steel industry regarding exports to the US.
"The new tax action could even be positive for Vietnam's steel industry, as it puts Vietnam's import tax rate (before taking into account other protective taxes) on par with other countries," SSI experts assessed.
Vietnam's steel exports to affected countries such as Mexico and Canada are also relatively small (as of December 2024, they were not in the top 10 steel export markets of Vietnam according to VSA data).
According to SSI, it should be noted that the ultimate impact may be complicated to determine, as there are several other types of duties such as CVD (countervailing duty) and AD (anti-dumping duty), of which AD duty is still under investigation.
The US recently released the preliminary investigation results and CVD preliminary duties on corrosion-resistant steel from Vietnam, with HSG and GDA receiving minimal duties (~0.13% and 0%). The preliminary AD results are expected to be released in the coming months.
"The outlook for the steel industry in 2025 remains positive based on bottomed steel prices, stronger domestic demand from the recovery of the real estate industry and strong public investment," SSI experts analyzed.
Vietnam’s steel industry stocks had an impressive “revival” in the trading session on February 11. Steel industry stocks were “collected” strongly by investors again. The VN-Index accumulated more than 5 points, approaching the 1,270 point mark.
This came right after a strong sell-off on February 10, showing investors' optimism about the prospects of the domestic steel industry.
