The Vietnam Steel Association (VSA) will coordinate with the Ministry of Industry and Trade to protect the legitimate rights and interests of local steelmakers who were recently accused of tax evasion by the US Department of Commerce (DOC).

Steel coils at the Vina Kyoei Steel Co Ltd’s production plant in the southern province of Ba Ria–Vung Tau

The decision, made by the DOC last week, would involve the imposition of anti-dumping measures and anti-subsidy rates on corrosion-resistant (CORE) and cold-rolled steel from Vietnam.

In 2016, US steelmakers succeeded in persuading the DOC to impose anti-dumping (AD) and countervail (CV) duties on Chinese steel, which meant cold-rolled steel from China would be subject to 265.79 percent AD and 256.44 percent CV duties when exported to the US.

AD and CV duties of 199.46 percent and 39.05 percent, respectively, were applied to corrosion-resistant steel from China.

DOC argued that Chinese products are being dumped in third-party countries, such as Vietnam, to circumvent these duties, leading to last week’s decision.

Although the product was only processed in Vietnam, the commerce department agreed with the claims of American producers that as much as 90 per cent of the product’s value originated from China.

Following the case, VSA said it was working with the Department of Trade Defence under the Ministry of Industry and Trade to follow developments relating to the ruling and to take the necessary measures in defense of local steelmakers in accordance with World Trade Organisation (WTO) regulations.

According to the VSA, the process of making corrosion-resistant or cold-rolled steel by Vietnamese businesses is a crucial step in the closed-loop manufacturing of high-quality flat steel bars, with factories in Vietnam receiving investment to the tune of hundreds of millions of US dollars.

The cold-rolling process generates between 30 and 40 percent added value to imported hot-rolled coil from China, the VSA argues, dismissing the claim by US authorities that the vast majority of the value of Vietnamese steel originates in China.

In addition, the association said, the US had yet to put a regulation in place regarding the required added value content of exports from Vietnam, making it difficult for Vietnamese steelmakers affected by the decision to respond.

In a release on its website, DOC said importers and exporters of Vietnamese merchandise that is produced from substrate originating in Vietnam or a third country have the option of seeking an exemption from cash deposits by certifying that the substrate originated outside of China.

DOC statistics showed that shipments of CORE from Vietnam to the US increased from 2 million USD to 80 million USD after preliminary duties were imposed on Chinese products in 2015.

Likewise, shipments of cold-rolled steel from Vietnam to the US climbed from 9 million USD to 215 million USD after the duties were imposed.

DOC is currently scheduled to announce its final determinations in these inquiries on February 16, 2018.

The case was initiated in September when US steel producers, including ArcelorMittal USA, Nucor Corp, AK Steel Holdings Corp and Steel Corp, filed lawsuits in which they claimed Chinese steel producers shipped products via Việt Nam to evade tariffs.

In November, the European Union’s anti-fraud office said it found Chinese steel was shipped through Vietnam to evade the bloc’s tariffs.-VNA