Vietnamese Steel to US: Transparent Origin for Long-Term Commitment

No use of Chinese origin materials is a safe way for Vietnam steel export to the United States. Picture: Ha Phuong.

Imports from China are declining

Around the US anti-dumping and anti-subsidy tax on cold rolled steel and stainless steel imported from Vietnam with raw materials from China, Mr. Ho Nghia Dung, Chairman of Vietnam Steel Association (VSA): Since the initiation of the investigation in 2016, the amount of steel exports to the United States has decreased. In 2016, Vietnam exported more than 900 thousand tons of steel to the United States, but the amount in 2017 is only more than 500 thousand tons.

Although there is a decline due to facing certain barriers, but now the United States is still ranked third in the group of steel importers of Vietnam. VSA data shows that the first quarter of this year, steel exports to the United States reached about 217 thousand tons, accounting for more than 15% of total export of Vietnam steel.

According to Dung, Vietnam's steel industry has grown a long way with two types of products. One is long steel construction, Vietnam has closed production from the beginning to the last stage, it can be from ore, steel scrap to produce iron, steel, hot rolled ... The second is flat steel, including cold rolled coil, coated steel. In the past years, Vietnam has not invested in the first stage; it means that there are no hot rolled coils, but mainly invested in the late stage to produce cold rolled steel and galvanized steel. Hot rolled coils are imported from foreign countries, mainly from China, Korea, Taiwan and Japan.

"Vietnam imports hot rolled coils from China for use as raw materials for producing galvanized steel and cold rolled steel, including those exported to the United States. That's reality. Previously, Vietnam imported more than 6 million tons of steel annually from China. At present, this amount of imports has decreased," Dung said.

VSA's figures also show that in the first three months of this year, imports from China were just over 1.1 million tons, down nearly half compared to the same period last year.

In addition, Dung further clarified: "When the US initiated investigations into the case, suspected fraudulent steel exports from China to Vietnam and then to the United States, VSA explained the two issues. First, not all steel exports to the United States come from China. Secondly, although it may be possible to import materials from China, the Vietnamese side has invested in a large, modern scale at the last stage to produce corrosion-resistant steel and cold rolled steel, which means that there has been outsourcing, transformation is not fraudulent; Vietnam does not totally import Chinese products and then export.

"In the past, VSA and the company repeatedly explained that to the United States. I think the US side has also taken in the recent official decision, the United States has levied on products derived from imported raw materials from China, and products which are not originating from China are excluded," Dung stressed.

Increase use of domestic materials

Prior to the decision to apply official tariffs recently from the US, VSA offers the only recommendation for steel enterprises is to quickly switch. After Formosa comes into operation, from 2017 onwards, there is significant domestic hot rolled coils, raw materials for galvanized steel and galvanized steel. Therefore, in the coming time, the products exported to the United States should be derived from materials originated from other countries and taken from the country, not imported from China. "Exporters to the United States definitely have to comply with the law, clearly declare the origin of long-term business with the United States," Dung said.

Around the issue of taxation of the United States, the Ministry of Industry and Trade has officially spoken. Ministry of Industry and Trade: On May 21, the US Department of Commerce (DOC) announced the final conclusion in the anti-dumping investigation against anti-subsidy tax with anti-carbon steel of anti-dumping corrosion (CRS) and cold rolled steel (CRS) from Vietnam. DOC said that there is not a payment of tax for these two products from China to Vietnam for export to the United States. Earlier, in December 2017, the United States announced a preliminary investigation of the incident. The Ministry of Industry and Trade cooperated with VSA and related companies to closely monitor the case from the beginning of the survey in November 2016.

The Ministry of Industry and Trade has repeatedly expressed its official views on the case with the United States and asked the DOC to conduct an objective investigation in accordance with the World Trade Organization for the United States, this measure does not apply to steel export enterprises of Vietnam. Currently, thề ĐỘC has informed the exemption of measures if the steel export enterprises of Vietnam prove that the export products are made from non-originating materials from China. The Ministry of Industry and Trade will continue to cooperate with related companies to handle DỌC procedures for exemptions as regulated.