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By Brian Flood
Aug. 2 — Vietnam will protect its domestic steel industry by imposing emergency tariffs through 2020, according to a notification released by the World Trade Organization (WTO) Aug. 2.
The duties on semi-finished and finished steel products will start as high as 23.3 percent, but will phase out in stages until they are down to zero.
WTO rules generally bar countries from imposing protectionist tariffs, but they make an exception for “safeguard” actions if a domestic industry is seriously threatened by a surge in imports.
According to Vietnam's notification, the country's domestic industry has suffered serious harm because of a surge in recent years, in the form of lost market share, lowered productivity and lost jobs. The Ministry of Industry and Trade, which conducted the investigation, placed the blame for the import surge in part on excess steel capacity in China.
“The economic crisis in China in recent years and the excess of capacity with the large amount of inventories of steel products in China; and the application of trade remedy measures to certain semi-finished and steel finished products of some countries are considered as ‘unforeseen development' and are the reasons for the surge of imports to Vietnam,” the notification said.
Many U.S. producers and politicians share similar concerns about Chinese overproduction. At the WTO in July, the U.S., along with Canada, the European Union and Japan, said Beijing must do more to reduce its excess capacity. China's Vice Minister of Commerce Shouwen Wang responded that overcapacity is a “global problem” that requires the “joint efforts of all countries” (142 ITD, 7/25/16).
Similarly, South Africa last week informed the WTO that it was starting its own investigation into whether safeguards on cold-rolled steel imports are warranted to protect its own steel industry (148 ITD, 8/2/16).
The embassies of China and Vietnam in the U.S. did not immediately respond to requests for comment.
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Vietnam's WTO notification is available at http://src.bna.com/hlM.
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