The visit of US president Barack Obama to Vietnam this week may mark an important moment in Asian geopolitics. The impact on the steel trade between the two countries is much less certain, Kallanish notes.

Obama’s announcement on Monday that the USA would lift its ban on arms sales to Vietnam may be a boost to the US arms industry, and the steelmakers that supply it. Far more significant for steel, however, will be discussion on trade.

Vietnam is increasing its cold rolled and coated flats exports to many destinations, including the USA. Considering that the country is only now commissioning its first hot rolled coil capacity, most of that steel is in fact Chinese HRC, re-rolled and coated locally.

This is one of the reasons why the USA’s United Steelworkers Union (USW) is strongly against the ratification of the Trans-Pacific Partnership (TPP), a wide-ranging trade deal designed to link several Asian and Pacific Americas nations together, but not China. After the USA blocked imports of Chinese OCTG, its imports from Vietnam increased sharply. The USA then imposed duties on Vietnam. That process may look a little different with TPP in place, however, as the treaty could limit duties.

Vietnam is already a common target for US trade authorities, with duties imposed on stainless pressure pipe, certain OCTG, steel nails and wire hangers, as well as frozen fish fillets, freshwater shrimp, Innerspring Units, carrier bags and wind towers. Circular welded pipes are currently under investigation.

Little wonder then that reassurances that Obama will push through TPP before he leaves office are second on Vietnam’s agenda only to buying weapons to defend against China.