The US concludes that steel tax evasion in Viet Nam does not comply with WTO rules

The US concludes that steel tax evasion in Viet Nam does not comply with WTO rules

According to the Vietnam Steel Association, the US puts trade barriers to protect domestic production which makes steel industry become more difficult.

On 5/12/2017, the US Department of Commerce (DOC) issued a preliminary decision in the anti-dumping investigation (AD), anti-subsidy investigation (CVD) anti-corrosion coating (known as galvanized sheet steel) and cold rolled steel imported from Vietnam.
DOC preliminary confirmed that the Vietnamese have evaded anti-dumping tax on two steel products, namely steel products are imported from China to Vietnam and then exported to the US. It is expected that the DOC will announce the final decision on this investigation on February 16 this year.

Following this decision of the DOC, Vietnam, as well as many other countries, expressed great concern about the change. In particular, the Ministry of Industry and Trade of Vietnam affirmed that the conversion from hot rolled steel to cold rolled steel and galvanized steel must be considered as a “significant transformation” as the US Department of Commerce has previously concluded.
Vietnam Steel Association (VSA) said that this action of the US is to protect domestic production and push pressure on the steel industry in Vietnam. If this decision does not change, the steel industry in Vietnam will suffer huge losses because the US will extend the anti-dumping and anti-subsidy tax which is applied to China with the rate of 199.43 % and 39.05% for zinc coated steel sheets in Viet Nam which are produced from hot-rolled and cold-rolled steel of China.

Therefore, Vietnamese steelmakers exported galvanized steel which produced from China hot-rolled and cold-rolled steel. They will have to pay for the US importers a huge tax which equivalent to 238.48% of export value to keep customers and markets from November 4, 2016.

Due to this situation, the Vietnam Steel Association has recently submitted a proposal to the Ministry of Industry and Trade to take measures to support steel enterprises. “In the event, DOC does not change their view in the final conclusions of this case, the Steel Association will recommend the Ministry of Industry and Trade to report to the Government to consider bringing US action to the WTO,” the Steel Association affirmed.

According to Mr. Ho Nghia Dung, Chairman of VSA, Vietnamese enterprises have invested at least one million US dollars for the production line to produce rolled steel products with high quality.
Mr. Dung also said that this article will create a bad currency as Vietnam have still imported steel from some the US countries which are subject to anti-dumping tax and anti-level with steel bulding and galvanized irons such as Taiwan and Korea.

Therefore, in this case, the United States will continue to take legal proceedings against other shirking jobs, which will create a pressure into mills in Viet Nam find it is very difficult to find HRC suppliers.

During this time, steel products which are exported to the US have to face with trade barrier, lead to many difficulties in the export industry. DOC has initiated anti-dumping and anti-subsidy proceedings for galvanized steel and cold rolled steel from Vietnam since 2016.

According to the report of VSA, in 2016, cold rolled steel, galvanized sheet and pre-painted galvanized steel in particular, which are exported from Vietnam to the US has experienced a significant growth, respectively 530% and 658% compared with 2015. This is partly because the United States previously applied anti-dumping and countervailing duties against imports from China.
As a result, American businesses have been looking for new suppliers and seizing that opportunity. Vietnamese companies have dominated this market so that export volume of Viet Nam increased suddenly.