English version machine-translated from the Vietnamese original — under review.
1. Comparison of average selling prices: Chinese steel and aluminium products are usually offered at lower prices than those of other countries on the international market owing to their very large production scale and state support. Anti-dumping investigations show that Chinese goods are heavily "dumped": for example, the EU concluded that steel bolts and screws from China were sold at abnormally low prices, injuring EU industry policy.trade.ec.europa.eu. The EU therefore imposed anti-dumping duties of 22.1% to 86.5% on these products to offset the price difference policy.trade.ec.europa.eu. Similarly, the US found that alloy aluminium sheet from China was sold at nearly 50-60% below fair value and received high subsidies, leading the Department of Commerce to impose AD duties of about 49.85-59.72% and CVD duties of 46.48-116.49% on Chinese aluminium sheet enforcement.trade.gov. In contrast, products from Vietnam are less often the subject of anti-dumping investigations, so their export prices usually reflect real costs; Vietnamese aluminium and steel prices are usually not as low as China's but remain competitive thanks to low labour costs. However, the final price difference when the goods reach customers in the US/EU also depends on the tariffs applied (see below). In practice, the low FOB price of Chinese steel has pulled world prices down to a low level, while the FOB price of Vietnamese steel is slightly higher because of smaller production scale and the need to import raw materials (for example, Vietnam imports steel billets and hot-rolled coil from China), which raises input costs. Even so, after duties, Vietnamese products sometimes have the advantage. For instance, Chinese aluminium extrusions entering the EU are subject to duties of 21.2-32.1%, while Vietnamese aluminium enjoys EVFTA tariff preferences (0% within quota), so its after-duty price can be more competitive policy.trade.ec.europa.eu geodis.com. In other words, China has the advantage in base price, while Vietnam has a tariff advantage in some markets, so the difference in final selling prices is not as large as the difference in initial ex-works prices.
2. Import duties in the US market: The United States applies relatively low MFN rates to many aluminium and steel products, but since 2018 it has added strong barriers on national security grounds. Specifically, the Trump administration imposed global import tariffs under Section 232: 25% on steel and 10% on aluminium from most countries (including Vietnam and China) reuters.com. These Section 232 tariffs were maintained under Biden to protect domestic production against global overcapacity concentrated mainly in China reuters.com. The US has no FTA with Vietnam or China, so both countries are subject to the normal most-favoured-nation (MFN) rates and receive no special exemptions or reductions other than the Section 232 exemptions for certain allies (Vietnam/China are not exempted). In addition to the 232 tariffs, the US also imposes a whole series of anti-dumping (AD) and countervailing (CVD) duties targeting products from China. There are currently more than 20 AD/CVD orders on Chinese steel (from steel plate and steel pipe to stainless steel…) and several on Chinese aluminium (such as aluminium extrusions and aluminium foil). The dumping margins determined for China are very high – for example, Chinese aluminium sheet was found to be dumped at ~50-60% and subsidised at over 50% enforcement.trade.gov. These cumulative AD/CVD duties push up the price of Chinese goods entering the US enormously (often by over 100%). By contrast, for Vietnam the US imposes direct AD/CVD duties less often. To date, the US has not imposed comprehensive AD duties on Vietnamese steel, but there have been anti-circumvention investigations: in 2018 the US Department of Commerce concluded that coated (galvanised) steel and cold-rolled steel of Vietnamese origin made from Chinese hot-rolled coil had "circumvented" the anti-dumping duties on China 2017-2021.commerce.gov. The US therefore applied duty rates corresponding to those on China to these products – up to AD 199.4% + CVD 39% for coated steel, and AD 199.8% + CVD 256.4% for cold-rolled steel with Chinese substrate 2017-2021.commerce.gov. This means that if Vietnamese companies use Chinese substrate steel, their exports to the US may face duties of nearly 200-256%, wiping out their price advantage 2017-2021.commerce.gov. In addition, the US recently (2023-2024) also opened AD/CVD investigations into aluminium extrusions from Vietnam over subsidy concerns (preliminary CVD rates of 2.85%, and 41.84% for non-cooperating companies) alcircle.com. In summary, in the US market: China bears a very heavy tariff burden (232 + numerous AD/CVD duties), while Vietnam is subject to the 232 tariffs like every other country and is less often hit by AD duties, but still faces risk if there are signs of origin circumvention.
3. Import duties and trade defence in the EU market (especially France): The European Union applies moderate MFN duties to aluminium and steel (usually 0-7% depending on the HS code). China has no FTA with the EU and therefore remains subject to these MFN duties. Since 2020, Vietnam has enjoyed preferences under the EVFTA: the EU committed to eliminating 85.6% of tariff lines on Vietnamese goods as soon as the EVFTA entered into force and 99.2% after 7 years geodis.com. Many Vietnamese steel and aluminium products have already had their EU duties reduced to 0% or will reach 0% within a few years, giving them an advantage over Chinese goods that remain subject to MFN duties. However, the EU also applies many trade defence measures to steel and aluminium. First, in 2018 the EU introduced a safeguard measure on imported steel to prevent cheap steel from flooding in after the US 232 tariffs. The EU mechanism is a system of country-specific tariff rate quotas (TRQ) for 26 steel product categories; once a quota is exceeded, a 25% duty applies eurofer.eu. Developing countries with a market share of <3% of the EU market are exempted within a certain limit eurofer.eu. In the initial phase, Vietnam, with its small market share (<3%), was largely unaffected by the quotas, whereas China, with its large market share, faced the risk of exceeding the quotas and paying the 25% duty if it exported beyond the set limits. Second, the EU actively investigates and imposes anti-dumping/anti-subsidy duties on China: there are currently dozens of cases of AD duties on Chinese steel (from cold-rolled steel, stainless steel, steel bars and wire rod…); for example, the EU imposed a 25.3% duty on cold-rolled stainless steel from China (2015), 21-35% on Chinese hot-rolled flat steel (2017), 17.2-27.9% on Chinese coated steel (2018)… More recently, the EU has also imposed AD duties of 21.2% – 32.1% on aluminium extrusions originating in China since 2021 policy.trade.ec.europa.eu. The reason given by the EU is that these products were being dumped, causing "material injury" to the EU industry, and that a level playing field needed to be restored policy.trade.ec.europa.eu. In addition, in 2022 the EU imposed AD duties of 22.1% – 86.5% on steel screws and bolts from China, because Chinese goods "undercut" (were dumped at prices far below) the selling prices of European companies policy.trade.ec.europa.eu. Conversely, Vietnam has so far faced virtually no significant direct EU AD/CVD duties in the steel and aluminium sector. France – as an EU member – follows this common policy: products imported from China into France are subject to the common AD/CVD duties issued by the EU. In some sectors such as parts manufacturing and fasteners, French companies are among those affected, as Chinese goods account for ~10% of the EU market and are sold cheaply policy.trade.ec.europa.eu. Thanks to the EVFTA, French importers can buy Vietnamese steel and aluminium at duty rates gradually falling to 0%, which increases the competitiveness of Vietnamese goods. To date, the EU/French market has taken a hard line on China (high AD duties, restrictive quotas), while remaining relatively open to Vietnam (preferential FTA duties, no significant AD duties yet) – but the EU always closely monitors the risk of circumvention via Vietnam and stands ready to investigate if necessary policy.trade.ec.europa.eu
4. Market share of Vietnam and China: In the US market, China was once a major steel supplier, but its market share has now fallen to a very low level because of the tariff barriers. In fact, Chinese steel accounts for less than 2% of US steel imports csis.org (since the US already had many AD/CVD barriers in place). China, from being among the top 10 steel suppliers to the US before 2010, has dropped out of this group; in 2019 China was not among the top 10 steel exporters to the US legacy.trade.gov. Conversely, Vietnam has emerged in recent years as a new source of supply: in 2017-2018 Vietnamese steel accounted for about 2-3% of US imports. After the circumvention duties, Vietnamese steel exports to the US fell by 41% in 2019 legacy.trade.gov, but Vietnam remained among the top 10 suppliers (about 2% of US steel imports in 2019) legacy.trade.gov. As for aluminium, China previously held a large share of some segments in the US such as aluminium foil, at times supplying over 60% of US aluminium foil demand. However, after the US imposed AD/CVD duties (2018), Chinese aluminium foil was almost eliminated from the US market and its share shifted to other countries. China now mainly exports other aluminium products to the US, in limited volumes because of the duties. Vietnam has a small, recently emerging share of the US aluminium market (partly through exports of aluminium extrusions and fabricated aluminium used in construction and industry). As there are not yet many barriers, the share of Vietnamese aluminium in the US is gradually increasing but remains below 5% of total US aluminium imports (according to 2022 estimates). In the EU market, China holds a significant share of steel imports: about 7-8% by volume (in 2018-2019, Chinese steel ~0.8 million tonnes out of a total of ~11-12 million tonnes imported by the EU in Q1/2019) legacy.trade.gov. China is the 4th largest steel supplier to the EU (after Turkey, Russia and Ukraine) legacy.trade.gov. However, with the EU restricting imports from Russia (because of the conflict) and applying quotas, China's market share may have edged up or down slightly recently but remains at around a single-digit percentage. Vietnam is currently not among the top 10 steel suppliers to the EU – its exports to the EU are still modest (<3% market share, so for now it is exempt from the safeguard, as mentioned) eurofer.eu. In France alone, steel imports from Vietnam also account for a small share; France mainly imports steel from within the EU or from large producers (Germany, Italy) and from traditional sources such as Turkey and the Middle East. For aluminium, China plays a major role in the EU market as an important supplier of semi-finished aluminium (especially extrusions and sheet). For example, the EU aluminium extrusion industry is worth €12 billion; before the AD duties, Chinese exports accounted for a significant share, threatening 40,000 EU jobs policy.trade.ec.europa.eu. After the EU imposed the duties, China's share of this segment fell sharply. Vietnam has only recently begun exporting aluminium to the EU; the turnover is still small but has grown thanks to the facilitation provided by the EVFTA. France does not yet import much aluminium from Vietnam, but there is potential for growth as EVFTA duties fall to 0%. In summary, China's market share far exceeds Vietnam's in most segments, but because it has run into barriers, China's actual market share in the US/EU has shrunk, creating room for Vietnam to expand its exports if it can meet origin requirements and offer competitive prices.
5. Impact of production costs, tariffs and policy: Inherent production costs and trade policy directly affect the final price of aluminium and steel products when they reach buyers in the US and the EU. In terms of production costs, China has the advantage of enormous scale and strong state support (e.g. cheap industrial electricity, subsidised loans and raw materials). In 2023, China produced 53.9% of global crude steel output csis.org, but large overcapacity (only ~74% of capacity utilised) results in oversupply. The OECD estimates that Chinese government subsidies to the steel industry are 5 times higher than those of other non-OECD countries and 10 times higher than those of OECD countries csis.org. Thanks to these subsidies, many low-efficiency Chinese steel mills continue to operate even though they should be loss-making, leading to sales below cost. As a result, when Chinese domestic demand slows, they export surplus steel to world markets at very low prices, putting downward pressure on prices for producers in the US, the EU and Vietnam as well csis.org. Meanwhile, Vietnam has low labour costs, but depends partly on imported raw materials (iron ore, steel billets, aluminium ingots…) and its production technology is not yet on a par with China's, so its basic production cost is slightly higher than China's. Many Vietnamese companies import billets or hot-rolled coil from China to roll into finished products, so their input material prices are influenced by China. In terms of tariffs and trade policy, import duty rates largely determine the final selling price. Without protective measures, Chinese goods are usually the cheapest. But with tariff barriers, the situation is reversed: Chinese steel and aluminium entering the US are almost unable to compete because they incur the 25% duty (Section 232) + very high AD/CVD duties (for some products the total duty exceeds 100-200%). Conversely, Vietnamese steel and aluminium entering the US are subject to the 25% duty (232) but not to AD duties (except in circumvention cases), so their after-duty price can be lower than that of the penalised Chinese goods. In the EU, thanks to the EVFTA, many Vietnamese products see their duties fall from ~5-7% MFN to 0%, creating a significant difference compared with Chinese goods that remain subject to MFN duties and possibly additional AD duties. For example, Vietnamese aluminium extrusions enjoy a 0% EVFTA duty within quota, while Chinese aluminium is subject to MFN duty (~7.5%) and AD duties of 21-32%, giving Vietnamese goods a tariff advantage of about 30% – a very large amount in the final selling price policy.trade.ec.europa.eu geodis.com. However, that advantage is only real if Vietnam meets the rules of origin and does not use Chinese raw materials under surveillance; otherwise, as noted, the EU stands ready to apply anti-circumvention measures similar to those of the US. In terms of other policies, EU quotas prevent Chinese exporters from selling massively beyond the limits, which keeps prices from falling further; Vietnam, with its small volumes, is little constrained by the quotas. In addition, environmental policies (e.g. the EU's upcoming carbon border adjustment mechanism, CBAM) may also have an impact: high-emission Chinese steel may be subject to a carbon levy, and Vietnamese steel may be as well if its emissions are high, increasing costs. At the macro level, trade experts note that broad-based tariffs also raise prices for end consumers. For example, one study forecast that the steel and aluminium tariffs would raise US domestic steel prices by ~8.2% and aluminium prices by ~5.7%, increasing costs for downstream industries such as automotive, construction… csis.org. Protectionist policy is therefore a double-edged sword: it helps counter dumping but also drives final prices up. In summary, Chinese products have a low base price but must "bear" high duties in the US/EU, while Vietnamese products have a slightly higher base price but enjoy more favourable tariffs – these two factors narrow the gap in final selling prices. China's low production costs are neutralised by tariffs, while Vietnam's higher costs are partly offset by trade preferences, so that the final price of Vietnamese aluminium and steel in the US and EU can be equal to or even lower than that of Chinese goods once all duties are included. This is why Vietnam has the opportunity to expand its market share in these markets if it makes good use of its FTA advantages and complies with regulations, at a time when Chinese goods are increasingly tightly controlled by trade defence instruments.
References: Official reports and press releases from the USTR, the US Department of Commerce (DOC), the European Commission (EC), the World Trade Organization (WTO) and expert commentary were used to compile the above analysis. Specific figures and evidence are cited from these sources to ensure the reliability and timeliness of the report enforcement.trade.gov csis.org policy.trade.ec.europa.eu policy.trade.ec.europa.eu
Compiled and researched by the Research and Development Department
Star Asia Company
