Impact of High U.S. Tariffs on Commodity Prices from China to Vietnam: Effects, Benefits for Vietnam, and Copper Price Trends

Taisei Copper Department
Apr 11
5 min read

Impact of High U.S. Tariffs on Commodity Prices from China to Vietnam: Effects, Benefits for Vietnam, and Copper Price Trends

On April 11, 2025, the new U.S. tariff policy under President Donald Trump sent shockwaves through global markets. With a 125% tariff imposed on Chinese goods and a 46% tariff on Vietnam (delayed by 90 days), key questions arise: How will commodity prices from China to Vietnam change? Will the high U.S. tariffs affect this trade flow? Could Vietnam benefit from this situation, and what will happen to copper prices? This in-depth analysis draws on real data and economic trends to provide a comprehensive overview.

1. Commodity Prices from China to Vietnam: Impact of High U.S. Tariffs

Current State of China-Vietnam Trade

China is Vietnam’s largest trading partner, accounting for 30-35% of its annual imports. According to Vietnam’s General Department of Customs (projected data for 2024), Vietnam imports approximately $120-130 billion worth of goods from China yearly, primarily electronic components (40%), machinery (20%), and raw materials like steel, plastics, and chemicals (25%). Copper and related products also play a significant role in the electronics and construction sectors.

With the U.S. imposing a 125% tariff on Chinese goods (up from 54%, per Reuters, April 10, 2025), Chinese exporters face immense pressure in the U.S. market, which consumes $400-450 billion of Chinese goods annually. This forces China to seek alternative markets, with Vietnam being a prime candidate due to its proximity and low logistics costs.

Impact on Commodity Prices

Short-Term Price Reduction to Boost Exports to Vietnam:

To offset losses from the U.S. market, Chinese producers may lower prices to increase sales to Vietnam. For instance, electronic components or steel could see a 5-10% price drop at the factory gate over the next 3-6 months, according to Bloomberg forecasts (April 10, 2025). This is driven by rising inventories as goods are blocked from the U.S.
Long-Term Cost Increase if China Retaliates with Tariffs:

China has responded by imposing an 84% tariff on U.S. goods since April 10 (CNBC, April 4, 2025). If tensions escalate, China might impose export tariffs on raw materials like copper or steel to Vietnam to protect domestic supply. This could raise commodity prices from China to Vietnam by 10-15%, especially for strategic items.
Trade Diversion Through Vietnam:

Some Chinese firms may use Vietnam as a transshipment hub to “re-label” goods and evade U.S. tariffs. According to Harvard Business School (October 24, 2024), about 16% of Vietnam’s exports to the U.S. in 2021 were re-exported Chinese goods. If this trend grows, prices of Chinese goods in Vietnam may stabilize, but logistics and processing costs could increase final prices slightly (estimated 3-5%).

2. Impact on Vietnam: Do High U.S. Tariffs Matter?

Direct Impact

The U.S.’s 46% tariff on Vietnam (though delayed by 90 days) does not directly affect China-Vietnam trade, as it’s an intra-Asian flow. However, if Vietnam continues to serve as a conduit for Chinese goods to bypass U.S. tariffs, stricter origin checks by the U.S. could disrupt this trade. This would push Vietnam to bolster domestic production to reduce reliance on China.

Indirect Impact

Increased Imports from China: With the U.S. market closed to China, Vietnam could see an influx of cheaper Chinese goods, especially raw materials and components. This lowers production costs for Vietnam’s electronics, textile, and construction industries.
Domestic Competition Pressure: Cheap Chinese goods flooding in could challenge Vietnamese producers, particularly small businesses unable to compete on price.

3. Does Vietnam Benefit?

Opportunities

Enhanced Role as a Middleman:

With U.S. tariffs hitting China, Vietnam could become a larger processing and re-export hub. Leveraging the 90-day tariff delay, Vietnam might negotiate with the U.S. to lower the 46% rate while attracting investment from Chinese firms shifting production. This trend began in 2018-2019, with FDI from China to Vietnam rising 30% (Reuters, May 16, 2024).
Boost to Domestic Production:

Short-term price drops in Chinese goods offer Vietnamese firms a chance to stockpile materials and enhance production capacity. Reducing reliance on China by producing components, metals, and consumer goods domestically could strengthen Vietnam’s economy.
Expansion to Other Markets:

As China loses U.S. market share, Vietnam could boost direct exports to the EU, Japan, and ASEAN, which are less affected by U.S. tariffs.

Challenges

Risk of U.S. Penalties: If Vietnam becomes a conduit for Chinese goods evading tariffs, the U.S. might impose harsher measures post-90 days, such as higher tariffs or bans on specific items.
Deeper Dependence on China: Without domestic growth, Vietnam risks becoming a “dumping ground” for cheap Chinese goods, weakening its own industries.

4. What Happens to Copper Prices?

Current Trends

Copper prices on the LME recovered from 8,400 USD/ton (April 8) to 9,100 USD/ton (April 11), up 8.3%, driven by optimism from the U.S.’s 90-day tariff delay for Vietnam (Metal.com, April 10). Vietnam imports about 150,000-200,000 tons of copper annually from China (projected from 2024 data), mainly for cables and electronics.

Forecast for Next Week (April 14 - 18, 2025)

Impact from China:
- If China imposes export tariffs on copper to protect domestic supply, prices in Vietnam could rise 5-10%, reaching 9,500-10,000 USD/ton.
- Conversely, if China floods Vietnam with cheap copper to offload inventory, prices might dip to 8,800-9,000 USD/ton short-term.
Impact from the U.S.:
- The 90-day tariff delay for Vietnam supports copper demand in electronics and construction, key export sectors to the U.S., stabilizing or slightly lifting prices to 9,100-9,600 USD/ton.
Global Factors:
- A strong USD (DXY ~108-109) caps copper price gains. If China announces an economic stimulus (hypothetical, April 15), demand could surge, pushing prices to 9,800 USD/ton.

Overall Outlook

Copper prices next week are likely to range between 9,100-9,600 USD/ton, with potential to hit 9,800 USD/ton if China boosts stimulus. However, a drop to 8,900 USD/ton remains possible if trade tensions escalate.

5. Conclusion and Recommendations

For Commodity Prices

High U.S. tariffs will cause volatile prices for goods from China to Vietnam: a short-term drop (5-10%) as China offloads inventory, followed by a long-term rise (10-15%) if China retaliates with tariffs. Vietnam should capitalize on cheap prices to stockpile materials while reducing reliance on China.

For Vietnam

Vietnam has a golden opportunity to expand its role as a trade hub and bolster domestic production, but it must navigate risks of U.S. penalties and over-dependence on China. Negotiations with the U.S. over the next 90 days are critical to maximizing benefits.

For Copper Prices

Vietnamese firms should monitor China’s policies and DXY trends closely. A dip to 9,000 USD/ton is a buying opportunity, while a rise above 9,600 USD/ton warrants reassessing demand.