Vietnam is joining a growing list of nations pushing back against China’s steel juggernaut. Starting in early March, the Southeast Asian country will slap temporary anti-dumping tariffs on certain Chinese hot-rolled coil (HRC) imports, a move announced by its Ministry of Industry and Trade on February 21, 2025.
Following in the footsteps of South Korea, Brazil, and India, Vietnam aims to shield its domestic steel industry from the flood of cheap exports fueled by China’s construction slump. As the largest buyer of Chinese steel outside China itself, Vietnam’s decision marks a bold shift in its trade strategy—and a potential turning point for global steel markets.
A Global Steel Storm
China, the world’s top steel producer, unleashed a torrent of exports in 2024—over a billion tonnes, the most in nearly a decade—as its domestic property sector faltered. With construction demand drying up at home, Chinese mills turned outward, dumping steel onto global markets at cut-rate prices. Vietnam, a key destination, absorbed roughly 8 million tonnes of HRC alone last year, a volume that has squeezed local producers like Hoa Phat Group and Formosa Ha Tinh Steel Corp. The ripple effects are being felt worldwide, prompting U.S. President Donald Trump to float a sweeping 25% tariff on all U.S. imports and spurring other nations to erect their own trade barriers.
Related: How to invest into Vietnam as a foreign investor
For Vietnam, the stakes are high. Hot-rolled coil, a versatile steel product used in everything from cars to construction, is a cornerstone of Chinese exports to the country. But the influx has battered local steelmakers, who last year called for an investigation into imports from China and India. While India escapes tariffs for now, Vietnam’s new levies—ranging from 19.38% to 27.83%—will hit about half of China’s HRC shipments starting March 7. The measures, set to last 120 days, signal Hanoi’s readiness to protect its industrial backbone amid a global trade showdown.
Pressure on Beijing
Vietnam’s tariffs add to mounting pressure on China to tame its colossal steel industry. Analysts like Jack Shang from Citigroup suggest that this wave of protectionism could force Beijing to revisit supply-side reforms, a tactic it used in the mid-2010s to curb overcapacity and shore up profits. “These moves should nudge China toward another round of discipline,” Shang noted, highlighting the potential for tighter production controls to steady the market. On the trading floor, the reaction was swift: steel futures in Shanghai dipped 1.3% by midday Friday, while Vietnam’s steel stocks climbed, reflecting investor confidence in the tariff shield.
The broader context ties back to U.S.-China tensions. Trump’s latest investment curbs, announced days before Vietnam’s tariff decision, aim to choke Chinese access to strategic U.S. sectors. While steel wasn’t explicitly targeted, the looming threat of blanket tariffs has amplified the urgency for Chinese producers to secure alternative markets—or face a profitability crunch. Vietnam, long a beneficiary of China’s supply chain shifts, now finds itself balancing opportunity and defense.
Vietnam’s Balancing Act
For Vietnam, the tariffs are more than a trade tactic—they’re a statement. The country has thrived as a manufacturing hub, drawing billions in foreign investment as firms diversify away from China. Yet its reliance on Chinese steel imports has left it exposed. By targeting HRC, Hanoi is safeguarding jobs and revenue at companies like Hoa Phat, whose lobbying helped trigger the anti-dumping probe. At the same time, Vietnam must tread carefully: China remains a vital economic partner, and overly aggressive measures could strain relations or disrupt supply chains.
The market response underscores the stakes. While China’s HRC futures slid, iron ore prices in Singapore held steady at $107.45 a tonne, suggesting resilience in raw material demand. Vietnam’s steelmakers, meanwhile, saw gains, buoyed by the prospect of a more level playing field. Still, the temporary nature of the tariffs—120 days—leaves room for adjustment, hinting at a pragmatic approach as Hanoi gauges the fallout.
A Wider Trend
Vietnam’s move mirrors a global pushback against China’s steel dominance. South Korea recently tightened its own import rules, while Brazil and India weigh similar levies. The collective action reflects a shared frustration: China’s export surge threatens industries far beyond its borders. For Vietnam, the challenge is to leverage this moment without alienating a neighbor whose economic heft still looms large. If successful, these tariffs could bolster domestic production and signal Vietnam’s growing assertiveness in a turbulent trade landscape.
As March 7 approaches, all eyes will be on how China responds—and whether Vietnam’s gamble pays off. For now, the message is clear: even as it welcomes investment, Vietnam isn’t afraid to draw a line in the steel.
Related
Discover more from Vietnam Insider
Subscribe to get the latest posts sent to your email.
Source: Vietnam Insider