Commerce Department Slaps Tariffs on Steel Made in China but Finished in Vietnam
12/07/2017 - In a precedent-setting decision, the U.S. Department of Commerce has ruled that China is circumventing steel tariffs by shipping products to Vietnam for finishing before exporting them to the United States.
As a result of the Commerce Department’s preliminary ruling, anti-dumping and countervailing duties already in place on corrosion resistant and cold-rolled steel from China will now also will apply to products originating in China but sent to Vietnam for processing.
The rates on those products are in excess of 200%.
According to the Commerce Department, shipments of corrosion-resistant sheet from Vietnam took off after the duties were imposed on China, rising from US$2 million to US$80 million. Shipments of cold-rolled steel, meanwhile have risen from US$9 million to$215 million.
The circumvention case arose on a complaint from Steel Dynamics Inc., California Steel Industries, AK Steel Corp., ArcelorMittal USA LLC, Nucor Corp. and United States Steel Corporation.
“The Commerce Department’s finding of circumvention represents a critical step to shutting down one of the many paths used to flood the U.S. with dumped and subsidized steel,” U. S. Steel said in a statement.
”This decision presents an encouraging sign for the steel industry and should put other countries and companies on notice that their cheating will no longer be tolerated.”
AK Steel, too, said it applauded the decision.
"We commend the Commerce Department for holding these parties accountable and for sending a signal to foreign producers and countries around the world that the U.S. will vigorously enforce its laws without exception,” AK Steel chief executive Roger Newport said.
The Bloomberg news service said the decision opens the door for the imposition of duties on other countries that process Chinese steel.
“The argument was always that if you took hot-rolled coil and shipped it somewhere else and turned it into galvanized coil, then they were considered different products, so you can’t materially put a duty on that,” Curt Woodworth, an analyst at Credit Suisse Group AG in New York told Bloomberg.
“The fact that Commerce basically said ‘no, we’re kind of throwing material transformation out the window’ is pretty important, and opens up the door to other possibilities.”
