Vietnam has implemented a 2% import duty on HDPE and LLDPE, effective July 8, 2025, aiming to shield its only domestic polyolefin producer, Long Son Petrochemical (LSP), from a surge of low-priced imports, particularly from Southeast Asia and China. LSP had lobbied for a 3% tariff during the development of its new facility, but downstream processors opposed the higher rate, leading the government to settle on the more moderate 2% levy.
The tariff is applicable to HDPE (specific gravity ≥ 0.94), LLDPE (< 0.94 SG, ≤ 5% alpha-olefin), and related ethylene-alpha-olefin copolymers in ‘primary forms’. Authorities expect this measure to encourage local sourcing and stabilize supply from LSP following concerns that zero-duty imports had undercut the company’s pricing and margins.
LSP’s integrated petrochemical complex, backed by SCG Chemicals, features a 950,000 t/yr mixed-feed cracker, 450,000 t/yr HDPE, 500,000 t/yr LLDPE, and 400,000 t/yr PP capacity. After a 10-month shutdown due to depressed margins, operations are slated to restart in mid-August 2025. The facility, a US $5.4 billion investment, aims to provide continuity in local supply and reduce reliance on imports.
While this tariff offers temporary relief, analysts caution that its benefits may be limited amid a global petrochemical downturn. In response, LSP is investing in upgrades, including new storage facilities and a planned shift to up to 70% ethane feedstock by 2027, which could improve cost efficiency compared to naphtha-based production.
Vietnam already operates a three-tier tariff system for polypropylene: 0% for FTA countries, 3% for MFN members, and 5% for non‑MFN origins. Experts expect a similar structure for HDPE and LLDPE, meaning Middle Eastern imports will incur the new 2% duty, while FTA partner imports may be exempt. Treatment of US-origin cargoes remains unclear amid evolving trade policy frameworks.
Despite the shift, Vietnam remains heavily import-dependent for polyolefins. Global oversupply and weak downstream demand continue to pressure market prices. The 2% duty marks a calibrated policy response to support LSP’s restart, but its long-term efficacy will be tested by LSP’s operational consistency, feedstock diversification, and broader market recovery.
