Vietnam‘s Dual HRC Tariff Regime Takes Effect – A Complete Breakdown for Buyers and Sellers

Starting today, Vietnam’s Ministry of Industry and Trade (MOIT) has activated a two‑tier tariff system on hot‑rolled coil (HRC) imports from China, closing a long‑standing loophole that allowed circumvention through minor specification changes. The new framework consists of a standing anti‑dumping duty (AD) on narrower HRC (width ≤1,880mm) plus an additional anti‑circumvention duty on wide HRC (1,880‑2,300mm). Below is a detailed analysis of what this means for importers, domestic mills and global steel trade flows.

1. The Dual Tariff Structure: What the New Regime Actually Does

1.1 Background: The Original Anti‑Dumping Duty (July 6, 2025 – July 5, 2031)

On July 4, 2025, Vietnam’s MOIT issued Decision No. 1959/QD‑BCT, concluding a 12‑month anti‑dumping investigation against Chinese and Indian HRC. The final determination imposed a definitive AD duty on Chinese HRC products with a width of up to 1,880mm, at rates ranging from 23.10% to 27.83%, effective for five years from July 6, 2025. The investigation found that Chinese HRC was being dumped into the Vietnamese market, causing material injury to domestic producers. By contrast, Indian HRC was exempted from duties. [2†L7-L10][3†L7-L10]

Width coverage: The original AD applied to HRC with widths ≤1,880mm, covering 27 HS codes. This created a clear incentive for Chinese exporters to increase the width of their HRC coils – by just a few millimetres – to escape the duty.

1.2 The New Anti‑Circumvention Duty (Effective April 17, 2026)

The anti‑circumvention investigation (initiated in late 2025) was launched after domestic mills Hoa Phat and Formosa Ha Tinh submitted evidence that Chinese exporters were deliberately adjusting product specifications to avoid the AD. [0†L34-L36]

MOIT’s preliminary findings confirmed the circumvention, leading to Decision No. 612/QD‑BCT, which imposes a provisional anti‑circumvention duty of 27.83% on wide‑width HRC imported from China, covering widths from 1,880mm up to 2,300mm, across 24 HS codes. [0†L4-L10][1†L10-L11]

This duty is temporary (120 days) while MOIT conducts further verification and public consultations before issuing a final decision. However, during this provisional period, the duty applies to all Chinese wide‑width HRC, with limited exemptions for certain steel grades.

Crucially, the new duty is additive – it does not replace the original AD. For a Chinese wide‑width HRC shipment, the importer faces:

• The original AD (23.10‑27.83%) PLUS
• The new anti‑circumvention duty (27.83%)

The combined tariff burden is therefore approximately 50‑55% on wide‑width HRC, effectively pricing Chinese material out of the Vietnamese market for this segment.

1.3 Narrow HRC (≤1,880mm): Still Subject to AD Only

Importantly, HRC with a width below 1,880mm remains subject only to the original AD duty of 23.10‑27.83%, not the new anti‑circumvention duty. However, this does not mean “no tariff.” The duty burden remains substantial, and any future expansion of the circumvention investigation could potentially extend coverage to narrower widths if similar circumvention patterns are identified.

Exemptions: Products with carbon content above 0.30% or plates with a thickness of 10mm or more may be exempt from the anti‑circumvention duty, subject to verification.

1.4 The Loophole That Has Been Closed

2. Impact on Procurement Managers (Buyers)

2.1 The Overwhelming Cost Advantage for Domestic Mills

Since early April, domestic producers have already capitalised on the upcoming policy shift. Hoa Phat raised its HRC price by VND 900/kg (approximately $35/t) to VND 14,390‑14,420/kg, while Formosa Ha Tinh increased its offers to around $550/t CFR Vietnam. Generally, domestic HRC selling prices are consistently $15‑45 per tonne higher than imported Chinese HRC (a premium of 2.9‑9%). [6†L19-L22][6†L10-L13]

With the combined 50‑55% tariff burden on wide‑width Chinese HRC, the price advantage of Chinese imports has been completely eliminated. Vietnamese rolling mills, pipe manufacturers and coated steel producers now face a clear choice: source domestic HRC from Hoa Phat or Formosa, or seek alternative foreign suppliers (Japan, South Korea, India) that are not subject to Vietnamese trade remedies.

2.2 Downstream Manufacturers: Immediate Cost Pressure

The tariff is already rippling through downstream industries. Coated steel and pipe producers have announced price hikes of VND 300,000‑600,000/t ($12‑23/t) in early April. [6†L27-L29] Vietnam’s Ministry of Construction has intervened, requesting local authorities to monitor prices and prevent speculation to stabilise the construction sector. [6†L28-L30]

For downstream buyers, the 120‑day provisional period creates a window to:

• Test alternative supply chains (Japanese, Korean, Indian HRC) before a final determination
• Negotiate long‑term contracts with domestic mills to secure volume and price stability
• Consider billet‑based production as an alternative to HRC imports (billet is not covered by the AD)

2.3 Billet: A Silver Lining for Importers

Iran‘s steel capacity loss – estimated at 13‑15 million tonnes per year – has created a 2.3‑2.5 million tonne billet supply gap in Southeast Asia. Chinese billet exports to the region have increased sharply, with CFR prices rising 18‑22% since early March to $480‑490/t. [6†L31-L34] Billet is classified under different HS codes and is not subject to Vietnam’s HRC AD or anti‑circumvention duties. For Vietnamese re‑rolling mills, sourcing billet from China remains a viable option, albeit at higher prices due to freight and insurance costs driven by Middle East tensions.

2.4 Strategic Procurement Recommendations

3. Impact on Export Sales Managers (Sellers)

3.1 Chinese Exporters: A Double Blow, But Narrower Widths Remain

For Chinese steel mills, Vietnam has long been a critical HRC export destination. In the first two months of 2026, Vietnam imported 1.89 million tonnes of HRC, of which 1.4 million tonnes (74.2%) came from China. [5†L8-L10] Chinese steelmakers have been the dominant suppliers to Vietnam‘s growing manufacturing sector.

The new anti‑circumvention duty effectively closes the wide‑width HRC market for Chinese exporters. However, narrower HRC (width ≤1,880mm) remains accessible, though it still carries a 23.10‑27.83% AD duty.

The situation is further complicated by China’s domestic pricing dynamics. Baosteel raised its HRC list prices by RMB 100/t ($14‑15/t) for May sales, reflecting rising raw material costs driven by Middle East geopolitical tensions. Combined with Vietnam‘s AD duties, Chinese mills face a narrowing margin for maintaining export volumes to their largest Southeast Asian market.

Strategic options for Chinese mills:

• Focus on narrow‑width HRC (≤1,880mm) for Vietnam, accepting the 23‑28% AD as the new baseline
• Shift to billet exports to Vietnam and other ASEAN countries (Indonesia, Philippines, Thailand), where demand is robust and trade barriers are lower
• Prioritise alternative Southeast Asian markets (Indonesia, Philippines) for wide‑width HRC
• Offer CFR Hai Phong pricing with transparent AD breakdown to maintain buyer trust

3.2 Alternative Suppliers: Japan, South Korea, India

The Vietnamese market has effectively opened a window for non‑Chinese HRC suppliers. Japanese, South Korean and Indian HRC are not subject to Vietnam‘s AD or anti‑circumvention duties (India was exempted from the original AD). For these exporters, the Vietnamese market has become more attractive as Chinese competition is priced out.

Key considerations for non‑Chinese suppliers:

• Japanese HRC offers stable quality but higher base prices
• South Korean HRC benefits from proximity and established trade relationships
• Indian HRC is duty‑free (MOIT’s final determination exempted India) and competitively priced, though Indian steelmakers face their own capacity constraints

3.3 Billet: The Unexpected Opportunity

Chinese billet exports to Southeast Asia have already surged. In the first two months of 2026, China‘s billet exports reached 1.77 million tonnes, up 15.95% year‑on‑year. For Chinese mills, billet offers a pathway to maintain Vietnamese market share without triggering HRC trade remedies.

Billet CFR pricing trends:

• Pre‑crisis (early March 2026): $410‑420/t CFR Southeast Asia
• Current (April 2026): $480‑490/t CFR Southeast Asia
• Drivers: Iranian supply gap + freight/insurance cost increases (18‑22% addition)

3.4 Strategic Sales Recommendations

4. Broader Implications and Outlook

4.1 A Tightening Regional Trade Environment

Vietnam‘s measures are not isolated. Across Southeast Asia, trade barriers are rising:

• Indonesia: Extended AD duties on flat steel from seven countries; reviewing HRC AD measures
• Malaysia: Investigating CRC imports from China, Japan, South Korea and Vietnam

Meanwhile, the EU has reached a provisional agreement to cut steel safeguard quotas by 47% (to 18.3 million tonnes/year) and double out‑of‑quota tariffs to 50% from July 1, 2026. Combined with CBAM carbon costs (€75.36/tCO₂e), the global steel trade environment is fragmenting rapidly.

4.2 Timeline for the Anti‑Circumvention Duty

The 27.83% anti‑circumvention duty is provisional for 120 days (until mid‑August 2026). During this period, MOIT will:

• Conduct further verification of circumvention patterns
• Hold public consultations with affected parties
• Issue a final determination that could confirm, modify or revoke the duty

If confirmed as a final measure, the duty would likely extend for a multi‑year period, permanently closing the wide‑width loophole.

4.3 Long‑Term Strategic Takeaways

1. For Vietnamese importers: The era of cheap Chinese wide‑width HRC is over. Diversify sourcing to domestic mills or non‑Chinese suppliers. The 120‑day provisional period is a window to test alternative supply chains.
2. For Chinese exporters: Vietnam remains accessible for narrow‑width HRC (≤1,880mm) and billet, but wide‑width HRC exports are no longer viable. Shift focus to Indonesia, Philippines, Thailand and other ASEAN markets.
3. For global steel traders: The Iranian supply gap (13‑15 million tpy) and Vietnam‘s duty create a structural shift in Southeast Asian steel flows. Billet, narrow‑width HRC and non‑Chinese HRC are the growth segments.
4. For domestic Vietnamese mills: Hoa Phat and Formosa Ha Tinh are the clear winners. Their order books are already filled for April. They now have the pricing power to raise domestic HRC prices further, benefiting margins but potentially fuelling downstream inflation.

5. Policy Summary Table

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