Vietnam Imposes Provisional Anti-Dumping Duties on Steel Imports from China and South Korea

In a decisive move to protect its domestic industry, Vietnam’s Ministry of Industry and Trade has introduced provisional anti-dumping duties on coated steel products from China and South Korea. Announced on April 1, 2025, under Decision No. 914/QĐ-BCT, the measures target a surge in imports that authorities say threatens local manufacturers. With duties as high as 37.13% for Chinese products and 15.67% for South Korean goods, the policy reflects growing concerns over unfair trade practices and their impact on Vietnam’s economy.

Rising Imports Prompt Action

The decision follows a sharp increase in coated steel imports, which reached 454,000 tonnes in the 12 months ending March 2024, a staggering 91% rise compared to the previous year. Even after the investigation into alleged dumping began, imports continued to climb, with 382,000 tonnes recorded in the last nine months of 2024 alone—a 20% increase over the same period in 2023. The Ministry argues that such volumes pose a serious risk to domestic producers, necessitating immediate intervention.

Coated steel, widely used in construction and manufacturing, is a critical sector for Vietnam, a country striving to bolster its industrial base amid rapid urbanization and infrastructure development. The influx of foreign steel at potentially below-market prices undermines local firms, which struggle to compete on cost while maintaining quality standards. The provisional duties, effective for 120 days unless extended or amended under Vietnamese law, aim to level the playing field while a full investigation continues.

Duty Rates and Exemptions

The provisional duties vary by country and company. For Chinese exporters, the highest rate of 37.13% applies to major players like Baosteel Zhanjiang Iron & Steel Co., Ltd. and its affiliates. South Korean firms face a maximum of 15.67%, with Hyundai Steel Company specifically levied at 13.7%. However, not all companies are subject to these tariffs. Certain exporters, including China’s Boxing Hengrui New Material Co., Ltd. and Yieh Phui (China) Technomaterial Co., Ltd., as well as South Korea’s POSCO, KG Dongbu Steel, and Dongkuk Coated Metal, have been granted a 0% duty rate, suggesting they were found not to engage in harmful pricing practices during the initial assessment.

The Ministry retains the flexibility to adjust the list of products under scrutiny, identified by specific HS codes, to ensure the measures remain targeted and effective. This adaptability is crucial in a complex trade environment where product classifications and market dynamics can shift rapidly.

Investigation and Economic Context

The anti-dumping probe, launched in response to complaints from domestic producers, seeks to determine the extent to which Chinese and South Korean exporters have sold coated steel below fair market value—a practice that distorts competition and harms local industries. The Ministry has collaborated with relevant authorities to evaluate the impact on Vietnam’s steel sector, focusing on both the volume of imports and the pricing strategies of foreign firms. On-site inspections of overseas producers, exporters, and domestic importers are ongoing, with a final determination expected after the provisional period.

Vietnam’s move comes amid broader regional concerns about trade imbalances, particularly with China, its largest trading partner. The country has increasingly positioned itself as a manufacturing hub, attracting foreign investment as companies diversify supply chains away from China due to geopolitical tensions and rising costs. However, this shift has also exposed Vietnam to challenges, including dependence on imported raw materials and intermediate goods like steel. Balancing industrial growth with protection for local businesses remains a delicate task for policymakers.

Economists note that anti-dumping measures, while protective, can have mixed effects. On one hand, they shield domestic industries from unfair competition, potentially preserving jobs and fostering self-reliance. On the other, they risk escalating trade tensions and increasing costs for downstream industries reliant on imported steel, such as construction and automotive manufacturing. “The duties are a necessary response to a clear threat, but they must be carefully calibrated to avoid unintended consequences” said Dr. Tran Minh, a trade policy expert based in Hanoi. He added that sustained dialogue with trading partners will be essential to prevent retaliatory measures.

Global Trade Dynamics

Vietnam’s action aligns with a global trend of countries imposing anti-dumping duties to safeguard strategic industries. The European Union and the United States have similarly targeted steel imports from China in recent years, citing overcapacity and subsidized pricing. For Vietnam, a member of multiple free trade agreements including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), navigating these policies requires adherence to international trade rules while addressing domestic priorities.

China and South Korea, both major steel producers, account for a significant share of global output. China alone produces over half of the world’s steel, often at prices that smaller economies like Vietnam struggle to match. South Korea, meanwhile, boasts advanced steelmaking technology, with companies like POSCO ranking among the industry’s leaders. The exemptions granted to certain firms from both countries suggest Vietnam is keen to maintain selective trade ties, focusing penalties on those deemed most disruptive to its market.

The provisional duties also reflect Vietnam’s broader economic strategy under the leadership of the Communist Party of Vietnam (CPV). The government has prioritized industrial modernization as part of its 2021-2030 socio-economic development plan, aiming to reduce reliance on imports for key materials. Steel, as a backbone of infrastructure and manufacturing, is central to this vision. Yet, with imports continuing to surge even during the investigation, questions linger about the effectiveness of short-term measures in addressing structural vulnerabilities.

Domestic Industry and Public Reaction

For Vietnam’s steel producers, the duties offer a lifeline. Small and medium-sized enterprises, which form the bulk of the sector, have long complained of being undercut by cheaper foreign imports. “This is a step in the right direction, but it’s only temporary. We need long-term policies to build capacity and competitiveness” said Nguyen Van Anh, a representative of a Hanoi-based steel manufacturer. Larger firms, some of which have invested heavily in modernizing production, echo the sentiment, urging the government to pair trade protections with incentives for innovation.

Public opinion on the measures appears mixed. While many support efforts to bolster local industry, others worry about rising costs. Construction companies, for instance, fear that higher steel prices could delay projects or inflate budgets, particularly for public infrastructure initiatives. Social media platforms in Vietnam have seen lively debates, with some users praising the government’s resolve and others questioning whether consumers will ultimately bear the burden.

Looking Ahead

As the Ministry of Industry and Trade prepares its final ruling, the provisional duties mark a critical juncture for Vietnam’s trade policy. The outcome of the investigation could set a precedent for how the country addresses similar challenges in other sectors, from textiles to electronics. With global trade tensions showing no signs of abating, Vietnam must tread carefully to protect its economic interests without alienating key partners.

For now, the focus remains on ensuring that domestic industries can weather the storm of rising imports. Whether these measures will foster sustainable growth or merely delay deeper reforms is a question that looms large over Hanoi’s policymaking circles.