Vietnamese manufacturers should use domestically-sourced raw materials to avoid incurring U.S. tariffs, Vietnam’s foreign ministry said on Thursday, days after Washington said it would impose large duties on some steel products shipped through the Southeast Asian country.

The U.S. Commerce Department said on Tuesday it would slap tariffs of up to 456% on certain steel produced in South Korea or Taiwan which are then shipped to Vietnam for minor processing and finally exported to the United States.

“The Ministry of Industry and Trade has warned local companies about possible moves by importing countries, including the United States, to apply stricter requirements in trade protection cases,” Foreign Ministry spokeswoman Le Thi Thu Hang said at a routine news conference in Hanoi.

Vietnamese companies should consider business strategies that include switching to domestic materials, she said.

Hang said Vietnam will continue to work with the United States in its efforts to crack down on goods of foreign origin illegally relabeled “Made in Vietnam” by exporters seeking to dodge tariffs.

Vietnam has been touted as one of the largest beneficiaries of the ongoing trade war between the United States and China, but recent comments from U.S. President Donald Trump have led some to believe that Vietnam may be the next target of U.S. tariffs.

Last month, Trump said Hanoi treated the United States “even worse” than China, amid the ongoing trade spat between Washington and Beijing.

Vietnam responded by saying it was committed to free and fair trade with the United States.

Vietnam’s largest export market is the United States, with which it has a rapidly growing trade surplus, which widened to $17 billion in the first five months of this year from $12.9
billion in the same period last year.
 

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