On March 8, 2018, U.S. imposed a 25 percent tariff on steel imports and a 10 percent tariff of aluminum imports under Section 232 of the Trade Expansion Act of 1962 citing national security issues. In a similar move in December 2017, the U.S. Commerce Department increased import duties on steel products specifically from Vietnam that originated from China as they evaded anti-dumping and anti-subsidy rules. The rise in tariffs will impact the steel industry in Vietnam, but steel companies in Vietnam believe that it will not have a major effect on the overall economy.
Since March 8, U.S. has granted exemptions to Mexico, Canada, EU, Argentina, Australia, Brazil, and South Korea from the import tariffs. The Vietnamese government is in talks with the U.S. to get an exemption, as Vietnam is a not major market for US steel and aluminum imports. Vietnam ranks as the 12th largest exporter of steel to the U.S.
Since March 8, U.S. has granted exemptions to Mexico, Canada, EU, Argentina, Australia, Brazil, and South Korea from the import tariffs. The Vietnamese government is in talks with the U.S. to get an exemption, as Vietnam is a not major market for US steel and aluminum imports. Vietnam ranks as the 12th largest exporter of steel to the U.S.
Antidumping and Countervailing Duties
On May 21, 2018, the US Commerce Department introduced import duties on Vietnamese steel products that originated in China. Imports of cold-rolled steel from Vietnam increased from US$ 9 million to US$ 215 million annually, while corrosion-resistant steel imports rose from $2 million to US$80 million since 2015, when the US imposed anti-dumping duties on China.
Corrosion resistant steel (CORE) from Vietnam, which originated in China, will face anti-dumping duties of 199.43 percent and countervailing duty duties of 39.05 percent. Cold-rolled steel imports will face anti-dumping duties of 199.76 percent and countervailing duties of 256.44 percent.
However, importers and exporters can seek an exemption if they can certify that their products are produced from substrate originating in Vietnam or any other country, outside of China.
Impact of tariffs
The rise in tariffs will affect the local manufacturers, but the impact on the overall economy will be minimal. In 2017, the U.S. accounted for 11.1 percent of Vietnam’s steel exports, but steel accounted for less than 2 percent of Vietnam’s total exports. However, the tariff rise will increase competition for local firms, especially in the domestic market. Chinese products meant for the U.S. could easily flow into Vietnam.
Overall supply can also increase in Southeast Asia leading to a drop in prices, which can ultimately benefit the end consumers.
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