Vietnamese steel enterprises seek opportunities in challenges

Despite facing numerous challenges, Vietnamese steel businesses can still leverage the new situation to maintain growth.

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The US imposition of a 25% tariff on imported steel remains a topic of great interest to the business community. With such a high tariff, Vietnamese steel exports to the US market face significant price challenges, reducing their competitiveness compared to domestically produced steel in the US and countries exempt from the tariff. Furthermore, major steel producers from China, India, Mexico, Canada, and Brazil may lower prices to maintain market share, putting pressure on Vietnamese businesses.

Speaking with a reporter from Investment Newspaper, Mr. Vy Tien Toan, CEO of Trung Tin Kim Steel Production and Trading Company Limited, said that in the short term, this negatively impacts the revenue and profits of Vietnamese steel exporting companies, especially those with a high proportion of exports to the US such as Hoa Sen Group, Nam Kim Steel, and Ton Dong A.

Furthermore, the Trump administration's plan to boost domestic steel production could reduce import demand in the long term, creating additional barriers for Vietnamese steel.

However, Vietnamese steel companies still have opportunities to capitalize on the new situation to maintain growth momentum. According to Mr. Toan, the imposition of tariffs on hot-rolled coil (HRC) on Chinese steel could help Hoa Phat increase its HRC sales to Hoa Sen, Nam Kim, and Ton Dong A for export to the US. In particular, Hoa Sen could take advantage of this opportunity to increase exports to the US in the first three years, while still being able to compete with countries that were exempt from previous tariffs.

Furthermore, as the competitive landscape among countries becomes more balanced, Vietnamese businesses, with their advantages in production and cost, can increase their market share in the US, thereby improving revenue and profits.

In the medium and long term, instead of relying on the US, Vietnamese steel businesses can target other potential markets such as the EU, ASEAN, Japan, and South Korea. Participation in free trade agreements like the CPTPP and EVFTA gives Vietnamese steel an additional tariff advantage, expanding its access to larger markets.

“To respond to the new situation, Vietnamese steel businesses need to focus on several strategic solutions, such as improving management capacity, modernizing technology to reduce production costs, and thereby increasing price competitiveness. They should research HS Codes that are less affected by tariffs to develop higher-value products and avoid tariffs. At the same time, they should strengthen value chain and logistics linkages to proactively control raw material prices and minimize risks from global political fluctuations…”, Mr. Toan said.

As a company specializing in the production and trading of various types of construction steel, hot-rolled steel coils, cold-rolled steel coils, galvanized steel, and various types of steel profiles, Mr. Dong Duc Trong, Deputy General Director of Chinh Dai Industrial Co., Ltd., believes that although the above information presents a challenge, it is also an opportunity for the company to focus on higher-value, higher-quality products to meet the international market's demand for steel products.

"This incident also presents an opportunity for us to focus on high-value products, instead of spending so much time on raw materials," said Mr. Dong Duc Trong.

Speaking with reporters, business leaders stated that Vietnamese steel imported into the US has already been subject to a 25% tariff, so there will be no further tariff increases. Many other countries, such as the EU, Canada, and Mexico, have lower tariff rates than 25%, therefore, their competitiveness compared to Vietnamese steel will likely decrease in the near future.

Not only steel, but Vietnam's aluminum industry is also affected by the new US tariff policy. According to Associate Professor Dr. Dinh Trong Thinh, Vietnam is currently subject to a 10% tariff on aluminum exports to the US, but this figure will increase to 25% in the near future. However, this tariff increase is not too difficult, as aluminum products on the US market are already subject to a 25% tariff.

"Although the increased tax leads to higher selling prices, making consumption difficult, in terms of competitiveness, the Vietnamese aluminum industry is not too worrying," Associate Professor Dr. Dinh Trong Thinh commented.

Source: https://baodautu.vn/doanh-nghiep-thep-viet-nam-tim-co-hoi-trong-thach-thuc-d249089.html