The U.S. Department of Commerce slapped heavy import duties on some steel products from Vietnam after it decided they originated in China, violating the U.S.’s anti-dumping and anti-subsidy orders.
The department on December 5 announced preliminary affirmative rulings that corrosion-resistant steel (CORE) and some cold-rolled steel products imported from Vietnam were produced from substrate originating in China. This circumvented existing anti-dumping and countervailing duty (AD/CVD) orders on CORE and cold-rolled steel from China, it said in a statement.
In 2016, the U.S. imposed the AD rate of 199.43% and CVD rate of 39.05% on imports of CORE from China, while AD and CVD rates of imports of China’s cold-rolled steel were set at 265.79% and 256.44%, respectively.
As a result of the rulings, the U.S. Customs and Border Protection will begin collecting cash deposits on imports of CORE and cold-rolled steel produced in Vietnam at the same rates applied on those from China.
Duties will apply to all shipments entering the United States on or after November 4, 2016, the date the circumvention inquiries were initiated, that remain unliquidated.
Importers and exporters of Vietnamese steel products produced from substrate originating in Vietnam or a third country can seek an exemption from cash deposits by certifying the substrate originated outside of China, the department said.
Shipments of CORE from Vietnam to the U.S. increased from US$2 million to $80 million after preliminary duties were imposed on Chinese products in 2015, it added. Likewise, shipments of cold-rolled steel from Vietnam to the U.S. increased from $9 million to $215 million after preliminary duties were imposed on Chinese products in 2015.
These inquiries were conducted upon the request of U.S. domestic producers of CORE and cold-rolled steel.
Vietnam argued that according to the World Trade Organization’s (WTO) rules of origin, the country to be determined as the origin of goods is either the country where the goods have been wholly obtained or the country where the last substantial transformation was carried out, said a report from VNA.
According to Vietnam, international practices and the U.S.’s rules showed that there is a substantial transformation after hot-rolled steel is processed to make CORE and cold-rolled steel. Therefore, CORE and cold-rolled steel produced in Vietnam using hot-rolled steel from a third country has Vietnamese origin.
The U.S. is scheduled to announce its final determinations for these inquiries on February 16, 2018.