HANOI (Viet Nam News/ANN) – Opportunities, however, will come with challenges as the country’s steel exports have found. A rise in trade protectionism in large markets such as the United States (US) and the European Union (EU) were among the most difficult tasks Vietnamese steelmakers must address.
For instance, the US Department of Commerce (DOC) had slapped duties of up to 456 per cent on a number of steel products from Vietnam including corrosion-resistant steel and cold-rolled steel with South Korea or Taiwan origin, which had allegedly circumvented US anti-dumping and anti-subsidy duties, according to the department.
The DOC said it had observed a sharp increase in shipments of corrosion-resistant steel (332 per cent) and cold-rolled steel (916 per cent) from Vietnam from 2016-19 compared to previous years since the US started imposing duties on South Korea and Taiwan steel products in December 2015 and February 2016.
The heavy duties imposed by the US has seen Vietnamese steel export to the world’s largest economy drop to just over USD3.49 billion, a nine per cent decrease from the same period last year.
Industry expert Nguyen Van Sua said the gloomy figure was a result of US-China trade tensions as the US ramped up efforts to counter origin fraud. Other countries were likely to take similar actions to protect their own steel industries.
“If we fail to fight off origin fraud among Vietnamese steelmakers, our products will face even higher tariffs in the US and traditional markets including ASEAN countries,” said Sua.
In addition, the price of Vietnamese steel products has been on the decline during the last 10 months of the year, fetching just over USD648 per tonne, an 11.4 per cent drop compared to 2018.
This price drop combined with rising protectionism and stricter scrutiny may prove to be daunting challenges for Vietnamese firms to overcome in order to maintain and boost their exports.
A representative from Hoa Phat Group – one of the country’s largest steelmakers – said origin fraud damaged the country’s image and hurt Vietnamese steel’s ability to compete effectively in the long run as more countries would likely put Vietnamese product on their watch-lists or impose higher duties.
Deputy Head of the trade remedies authority under the Ministry of Industry and Trade Chu Thang Chung said only a handful number of Vietnamese steel makers had engaged in origin fraud. While yielding short-term benefits for a few, it would cause significant financial damage to others trying to meet stricter regulations in import markets.