Vietnam’s steel boom faces global hurdles as tariffs heat up

Proceeding from a latest article, Bloomberg features that as Vietnam’s steel industry surges forward, driven by rapid economic growth and a booming infrastructure sector, it finds itself navigating a global trade landscape fraught with challenges—from escalating tariffs to fierce competition.

With domestic production set to increase and new markets to explore, Vietnam is shaping a future that could redefine the steel trade in Southeast Asia.

The Pomina Flat Steel JSC plant near Ho Chi Minh City is already sweltering as molten metal is poured, shaped, and cut into rods for processing. Just down the road at a Vietnam Steel Corp facility, steel strips are immersed in an acid bath and passed through a press, making them thinner and stronger. These products are destined for one of the fastest-growing steel markets in the world. According to the Vietnam Steel Association, production could increase by 10 per cent this year, with demand expected to reach 25 million tons, up 5 per cent from last year.

Vietnam's rapid economic growth, driven by infrastructure expansion, has been a boon for steel manufacturers such as Pomina and state-owned VNSteel. However, the steel industry faces global trade challenges, as countries introduce tariffs to curb cheap steel exports. Steel producers in Vietnam are caught in a complex situation between escalating global resistance to low-priced steel and punitive US tariffs on manufacturing economies like theirs.

The pressure has been felt particularly hard after the US imposed high tariffs during the Trump administration. In response, Vietnam imposed its own tariffs on Chinese steel, such as a 28 per cent levy on hot-rolled coils and an additional 37 per cent on galvanized steel imports. These measures, while currently temporary, may become permanent.

“This has leveled the playing field,” says Vu Tran, former steel trading head at Cargill Inc. With Chinese producers no longer able to undercut on price, Vietnamese mills are now more competitive.

The global landscape has become more challenging, with countries like India introducing safeguard measures against rising steel imports from Vietnam. Despite these obstacles, the sector is adapting, with firms like Hoa Phat Group investing in new production facilities. As the industry grows, analysts predict Vietnam will continue to find new export markets, including the EU and Latin America.

“Going out and finding new markets or expanding alternative markets is all the more important now that tariffs are spreading,” says Tomas Gutierrez, analyst at Kallanish Commodities Ltd. As competition intensifies, Vietnam's steelmakers are adapting to a shifting global landscape.

By Naila Huseynova