After reaching an agreement with the United States, Vietnam has officially taken action against China, imposing a 27% tariff on China for five years, which has disappointed many.

In July 2025, after reaching a trade agreement with the United States, Vietnam quickly imposed a 27.83% anti-dumping duty on hot-rolled steel from China for five years, drawing widespread international attention. This move seemed like a sudden blow at a critical moment in the Sino-US rivalry, and Vietnam's choice was unexpected. What is behind it? Is it a geopolitical calculation or driven by economic interests?

The international trade situation in 2025 has been turbulent, with the economic competition between the US and China entering a feverish stage. Since the trade war in 2018, the US has tried to curb China's economic rise through high tariffs and technology blockades.

On April 2, 2025, President Trump signed an executive order announcing "reciprocal tariffs" on goods from multiple countries including China, imposing a 104% tariff on Chinese goods, aiming to force China to compromise through economic pressure. As an important economy in ASEAN, Vietnam has become a focal point for global supply chain shifts in recent years due to its low-cost labor and geographical advantages.

American companies such as Apple and Intel have continued to expand their investments in Vietnam, with factories in Ho Chi Minh City and Hanoi becoming key nodes in global electronics manufacturing and textile industries.

In 2024, Vietnam's exports to the US reached nearly $119 billion, an increase of 23.3%, showing its growing dependence on the US market. However, Vietnam's role in the Sino-US rivalry is complex; it needs to maintain its economic ties with China while also dealing with US geopolitical pressures.

On July 2, 2025, the US announced a trade agreement with Vietnam, under which Vietnam would implement zero tariffs on US goods, and the US would reduce tariffs on Vietnamese goods to 20%, lower than the initially threatened 46%. This agreement seems to have given Vietnam some breathing space, but its subsequent actions were surprising.

On July 6, 2025, the Department of Trade and Industry of Vietnam issued a notice announcing the imposition of a 27.83% anti-dumping tax on hot-rolled steel products originating from China, for a period of five years. This

This move by Vietnam is seen as a response to US trade demands, because the US-Vietnam agreement explicitly states that the US will impose a 40% tariff on "Made in China" goods transiting through Vietnam, to prevent Chinese goods from bypassing US high tariffs through Vietnam. The decision to impose tariffs not only affects Chinese export enterprises but also causes a chain reaction in Vietnam's own economy.

China accounts for about 45% of Vietnam's hot-rolled steel imports, making it an important market for Chinese steel exports. The tariff directly increases domestic steel prices in Vietnam, and construction and manufacturing costs are expected to rise by more than 20%. Construction companies in Ho Chi Minh City face pressure to adjust budgets, and some small and medium-sized projects have been suspended due to increased costs.

The Vietnamese government claims that the tariff is intended to protect the domestic steel industry and prevent the market from being flooded with cheap imports. However, Vietnam's local steel production capacity is limited and cannot meet all the demand, so it still needs to rely on imports in the short term. The tariff measures have led to supply chain adjustments, with Thai and Malaysian steel suppliers rapidly entering the Vietnamese market to fill the gap left by Chinese steel.

In March 2025, the US-ASEAN Business Council organized a visit by over 60 American companies to Vietnam, covering the fields of technology, manufacturing, and energy, indicating the strategic positioning of Vietnam in the global supply chain. The terms of the US-Vietnam trade agreement require Vietnam to strengthen oversight of "Made in China" goods to prevent them from being labeled as "Made in Vietnam" for export to the US.

In response, Vietnam has increased port inspections, extended customs clearance times, and increased operating costs for importers. On July 10, the General Department of Customs of Vietnam issued new regulations requiring strict origin reviews for all containers coming from China, further limiting the flow of Chinese goods.

The Vietnamese tariff policy has also sparked controversy domestically. Some economists pointed out that while the tariff may gain temporary relief from US tariffs, it could harm long-term economic cooperation with China.

In 2024, bilateral trade between China and Vietnam exceeded $200 billion, with China being Vietnam's largest source of imports. The tariff not only affects the steel industry, but could also impact other sectors such as electronics and textiles.

Small and medium-sized enterprises in Vietnam have been particularly affected, as they lack pricing power and alternative suppliers. Chambers of commerce in Hanoi and Ho Chi Minh City have called on the government to re-evaluate the policy, proposing subsidies or tax cuts to alleviate business pressure, but the government has yet to respond clearly.

The international community has had mixed reactions to Vietnam's decision. The Singapore Straits Times analyzed that this move is a "testament of loyalty" to the US, but may weaken Vietnam's neutral image within ASEAN. The Hong Kong South China Morning Post pointed out that Vietnam is trying to benefit from both sides in the Sino-US rivalry, but the tariff decision may prompt China to take retaliatory measures, making Vietnam's economy face greater uncertainty.

Thailand and Malaysia have seized the opportunity, increasing their steel exports to Vietnam to try to capture market share. The trade structure within ASEAN has thus seen subtle changes, with intensified regional supply chain competition.

Chinese export enterprises have quickly adjusted their strategies, with some steel companies shifting their target markets to Indonesia and the Philippines to reduce reliance on Vietnam. The Chinese Ministry of Commerce organized meetings to assess the impact of the tariff, researching possible countermeasures, including imposing reciprocal tariffs on Vietnamese goods or strengthening market access reviews. On July 15, 2025, China announced stricter inspections of certain Vietnamese agricultural products, extending customs clearance times, showing an initial response.

Domestic price increases in Vietnam are becoming evident, with building materials and manufactured products seeing rising prices, affecting the cost of living for ordinary citizens. The government has promised to stabilize the market through fiscal subsidies, but the effectiveness remains to be observed. Vietnam must continue to seek balance between the US and China, consolidating its trade relations with the US while avoiding excessive alienation from China.

Other ASEAN countries are closely watching the developments. Cooperation under the RCEP framework has become an important avenue for China to respond to Vietnam's tariff measures, by deepening trade links with other ASEAN countries to offset some losses. Vietnam's tariff decision may bring short-term economic pain, but its long-term impact depends on the course of great power rivalry and Vietnam's subsequent policy adjustments.

Original article: https://www.toutiao.com/article/1838254215683083/

Statement: The article represents the views of the author.