US RECIPROCAL TARIFFS AND OPPORTUNITIES FOR VIETNAMESE MANUFACTURERS (JULY 2025)

English version machine-translated from the Vietnamese original — under review.

SUMMARY OF US TRADE POLICY IN 2025 TOWARDS VIETNAM AND CHINA (As of July 2025)

I. General context and trade policy direction of President Trump's term as the 47th President (2025)

The administration of President Donald Trump in his term as the 47th President (starting in 2025) continues to pursue a strongly protectionist trade policy, using tariffs as its main negotiating tool. The initial plan was to impose a 10% tariff on "most imports", possibly higher depending on each country's trade deficit. This plan was postponed until 9/7/2025 to allow bilateral negotiations.

• Vietnam and China are the focus: Because of the US-China trade war (2018-2019), many US importers shifted orders from China to Vietnam to avoid tariffs. As a result, Vietnam's exports to the US nearly tripled, making the US Vietnam's largest market. This has made the US concerned about "spillover" (Chinese goods "disguised" as being of Vietnamese origin).
• For China: The US reached a limited "truce" agreement, with China making partial concessions (restoring US access to rare earth minerals), but many other disagreements remain.
• For Vietnam: The US threatened very high tariffs (up to 46% on most goods) if no agreement was reached before 9/7/2025. This rate is even higher than the tariffs the US currently applies to Chinese goods (~25%). Under this pressure, Vietnam negotiated and reached a bilateral agreement in early July 2025.

II. Main import tariff policies in 2025

1. Section 232 tariffs on steel and aluminium (national security tariffs):

• From 12/3/2025, the Trump administration restored and extended the Section 232 tariffs to all imported steel and aluminium products at a flat rate of 25%, with no exceptions or exemption quotas. This rate applies equally to steel and aluminium goods from both Vietnam and China.
• Impact: "Fabricated sheet steel products (e.g. air grilles stamped from steel sheet, welded steel frames) and steel hollow sections (fabricated, painted box tubes) from both Vietnam and China are all taxed at 25% right at the US border. Similarly, thin aluminium sheet (aluminium blades, aluminium grilles, aluminium partitions) and aluminium extrusions (profiles) from these two countries are also subject to the 25% Section 232 tariff." (US TARIFF REPORT JULY 2025.pdf)
• Note: This 25% tariff is added on top of the ordinary most-favoured-nation (MFN) rate, but because the MFN rate is low (0-5%), the main impact is a significant increase in import cost.

1. Section 301 tariffs and "trade war" tariffs on China:

• The Section 301 tariff schedules (applied from 2018-2019) remain in force on most Chinese goods: 25% on about USD 250 billion of industrial goods and 7.5% on about USD 120 billion of other consumer goods.
• For Vietnam: "In contrast, Vietnam is not subject to Section 301 tariffs." (US TARIFF REPORT JULY 2025.pdf). This gave Vietnamese goods a major competitive advantage over Chinese goods in the 2018-2024 period. For example, a metal ventilation louver from China may be subject to total tariffs of ~50% (25% Section 232 + 25% Section 301), while a similar product from Vietnam is subject only to the 25% Section 232 tariff.

1. New bilateral tariff policy in 2025 (US – Vietnam agreement):

• On 2/7/2025, President Trump announced an agreement with Vietnam: the US would not impose the threatened 46% tariff, but would instead apply a 20% tariff on "many goods" exported from Vietnam.
• Special note: "Disguised, transshipped" shipments from third countries (especially China) through Vietnam will be subject to tariffs of up to 40% if detected. "This special clause targets Chinese goods labelled as Vietnamese to evade tariffs – if detected, those shipments will be penalised with a very heavy 40% tariff." (US TARIFF REPORT JULY 2025.pdf)
• This 20% rate is regarded as the general minimum rate for Vietnamese goods, keeping Vietnam cheaper than Chinese goods in the US (as Chinese goods are still subject to the ~25% Section 301 tariff). This 20% rate most likely already includes the MFN tariff. Products subject to Section 232 tariffs (steel/aluminium) may still be subject to 25% rather than 20%.
• For China: The US has not granted any new bilateral tariff preferences. Most US tariffs on Chinese goods remain at their previous levels (25% or 7.5% under Section 301).

III. Anti-dumping and countervailing duty measures (AD/CVD)

The US applies AD/CVD vigorously to protect domestic manufacturing, with China as the main target.

• Chinese goods: A great many Chinese steel and aluminium products are subject to very high AD/CVD duties (some up to several hundred percent), making these goods almost uncompetitive. Examples: Chinese cold-rolled steel and galvanized steel are subject to total duties of over 200%; Chinese aluminium extrusions have been subject to AD of ~86% and CVD of ~17% since 2010.
• Vietnamese goods:Steel sheet/coil: Vietnam has no direct AD order. However, if Chinese raw material is used (e.g. cold-rolled/coated steel made from Chinese substrate), it will be considered duty circumvention and be charged the AD/CVD duties applied to China (e.g. Vietnamese coated steel made from Chinese substrate was charged AD of 199.43% + CVD of 256.44%). The US also opened an AD/CVD investigation into Vietnamese corrosion-resistant steel in 2024.
• Steel pipe/hollow sections: Vietnam has no significant AD order. But if Vietnamese steel pipe uses Chinese steel coil as raw material, the US may apply China's AD duties (40-114%).
• Aluminium sheet, thin aluminium: Vietnam is not subject to direct AD/CVD.
• Aluminium extrusions: "In 2023, the US aluminium association filed anti-dumping petitions on aluminium extrusions from 14 countries (including Vietnam)... In 10/2024, the US ITC concluded that the US aluminium industry was not materially injured by aluminium extrusions from the 14 countries (including Vietnam). Therefore, the DOC did not impose any AD/CVD duties on aluminium extrusions from Vietnam and the other countries in this case." (US TARIFF REPORT JULY 2025.pdf). This is a positive signal, but the US will closely monitor flows of capital and raw materials from China into Vietnam.

In short: "Looking at the table above, it can be seen that Chinese goods bear a far heavier tariff burden than Vietnamese goods in many respects. [...] In particular, a great many Chinese steel and aluminium products are subject to US anti-dumping and countervailing duties (some up to several hundred percent), pushing up the price of Chinese goods very sharply or completely eliminating their competitiveness. In contrast, most Vietnamese steel and aluminium goods are currently not subject to AD/CVD duties (except for a few circumvention cases involving Chinese raw materials). This remains a significant advantage for Vietnamese businesses exporting to the United States." (US TARIFF REPORT JULY 2025.pdf)

IV. Factors affecting export advantage beyond tariffs

1. Logistics costs and delivery time:

• Sea transit time from Vietnam to the US West Coast (30-45 days) is comparable to that from China (20-30+ days).
• Container freight costs are currently low and nearly equal for both countries. "Logistics costs per unit of goods from Vietnam and China into the US currently do not differ very much." (US TARIFF REPORT JULY 2025.pdf). At times, freight from Vietnam has even been cheaper.
• Conclusion: Logistics is no longer the major advantage for China that it once was. "The deciding factor has shifted to tariffs, rather than transport as before." (US TARIFF REPORT JULY 2025.pdf)

1. Reputation of origin and brand policy in the US:

• China: Faces strong prejudice in the US due to trade tensions and security concerns (UFLPA, technology). The "Made in China" image has been affected by quality scandals and espionage concerns. "A 2023 Pew survey showed that most Americans view goods from allied countries more favourably than goods from China." (US TARIFF REPORT JULY 2025.pdf).
• Vietnam: "Vietnam has emerged as a reliable alternative destination. Vietnamese goods are rarely seen as a threat – the US even wants to “upgrade” Vietnam into a high-tech partner, as long as Vietnam reduces its dependence on Chinese components." (US TARIFF REPORT JULY 2025.pdf). The "Made in Vietnam" image gives US buyers greater reassurance. Vietnam is also actively controlling Chinese companies borrowing Vietnamese origin.
• In short: "In terms of reputation of origin, Vietnam has a soft advantage over China. The US government and international businesses see Vietnam as a reliable alternative source of supply with low geopolitical risk. The image of Vietnamese goods in the US is fairly positive or neutral, while Chinese goods face much scepticism." (US TARIFF REPORT JULY 2025.pdf)

1. Technical barriers and quality standards:

• The US market has strict technical requirements and quality standards (ASTM, ANSI/NSA, UL, AMCA, ASHRAE, OSHA, EPA...).
• China: Has long experience, and many factories hold international certifications. However, inconsistency and past quality scandals mean Chinese goods are closely scrutinised.
• Vietnam: Its export manufacturing sector is still young but is progressing rapidly thanks to FDI and large orders. Many Vietnamese companies have obtained international certifications.
• Common barriers: Neither country is an FTA partner, so their steel and aluminium products are excluded from US public procurement projects (Buy American Act, Buy America).
• In short: Technical barriers apply equally, but Vietnam has an advantage in "compliance reputation" and is less entangled in non-trade concerns than China.

V. Conclusion: A comprehensive comparison of Vietnamese and Chinese goods in the US market (2025)

In 2025, steel and aluminium products of Vietnamese origin have a more comprehensive competitive advantage over Chinese products in the US market.

• **Tariffs and trade barriers:**Vietnamese goods bear lower overall tariffs: 25% (Section 232) and 20% (new agreement), with very few AD/CVD cases.
• Chinese goods are simultaneously subject to Section 232 tariffs (25%), Section 301 tariffs (25% or 7.5%), and a whole series of very high AD/CVD duties (some in the hundreds of percent).
• This is especially true for aluminium extrusions and fabricated sheet steel – sectors in which China is almost completely embargoed by AD/CVD duties.
• Bilateral preferences: The US has no FTA or GSP with either country. However, Vietnam has negotiated a general tariff rate of 20%, while China remains in a "confrontational" position and keeps its previous tariff rates. The US wants to keep Vietnam in the supply chain.
• Logistics: Transport costs and times are almost equal and no longer give China a major advantage.
• Reputation of origin and brand: Vietnamese goods have a "clean", less politicised image and are trusted more by the US government and businesses as an alternative source of supply. Chinese goods face many doubts regarding quality and security.
• Technical and quality barriers: Both must meet high standards. China has experience but is closely scrutinised; Vietnam is progressing rapidly and has less "notoriety".

"Taking all aspects together, it can be concluded: In 2025, steel and aluminium products of Vietnamese origin have a more comprehensive competitive advantage than products of Chinese origin in the US market." (US TARIFF REPORT JULY 2025.pdf). Vietnam faces a great opportunity to capture the market share left by China, but needs to keep improving quality, ensuring transparency of origin and meeting the demanding requirements of the US market.

Compiled by the Market Research Department - NSCA Company