The US deals with Vietnam’s trade cheating

The US Department of Commerce (DOC) on June 23 announced the opening of an anti-dumping investigation on tires imported from Vietnam and three other Asian countries and see if Vietnamese manufacturers are receiving unfair subsidies or not.

Three other Asian countries that were investigated by the US were South Korea, Taiwan and Thailand.

Screenshot of a May 13 United Steelworkers (USW) petition, representing workers attire factories across the US

Vietnam’s tire producers were accused of dumping 5-22%, the lowest among the four countries under investigation. Meanwhile, the dumping margin of tires imported from Thailand was highest at 106-217.5%; followed by Taiwan 21-116% and Korea 43-195%.

Goods from Vietnam subject to dumping investigation are passenger tires and light trucks (PVLT), according to a press release posted on the department’s website.

The department said it was also investigating whether tire manufacturers in Vietnam would receive subsidies for passenger and light truck tires.

The surveys followed recommendations submitted in May by United Steelworkers (USW), representing workers at tire factories across the US.

USW International President Tom Conway said: “Despite the rising demand for PVLT tires, domestic manufacturers are still struggling to cope with a declining market share, falling profits and job losses.”

USW represents workers at Michelin tire factories (MICP.PA), Goodyear (GT.O), Cooper (CTB.N), Sumitomo (8053.T) and Yokohama (5101.T) in Ohio, Arkansas, North Carolina, Kansas, Indiana, Virginia New York and Alabama.

Last year, the US imported about $4 billion worth of tires from four countries subject to this dumping investigation.

In particular, the US imported nearly $2 billion from Thailand; $1.2 billion from Korea in 2019 and about nearly $500 million from Vietnam. USW said that tire imports from four countries have increased by nearly 20% since 2017, reaching 85.3 million tires, after trade tensions between the US and China occurred.

One day after the DOC issued the decision, a representative of the Vietnam Chamber of Commerce and Industry under the Ministry of Industry and Trade on June 24 said the agency is actively coordinating and working with ministries, sectors and businesses to provide the US with the most accurate information about rubber industry development policies, production costs, selling prices of businesses …

The Ministry of Industry and Trade of Vietnam said it had warned that the risk of tire products to be investigated by foreign countries to apply trade remedies from July 2019 to a high degree.

The agency also confirmed to have worked with associations and exporters to the US to actively capture information and respond in case of investigation.

According to Zing, Mr. Le Trieu Dung, director of the Department of Trade Defense (Ministry of Industry and Trade), said the US side has just started investigating on the basis of the plaintiff’s claim of the domestic tire industry but not officially imposing a tax.

Mr. Le Trieu Dung, Director of Department of Trade Defense (Ministry of Industry and Trade

On the Government side, Mr. Dung said that the Ministry of Industry and Trade will actively discuss with the US agencies to confirm that Vietnam’s programs are not subsidized.

He explained: “Vietnam’s policy is transparent. Vietnam promotes the development of the rubber industry, not just the tire industry.”

Explaining the lawsuit, Mr. Dung said that the plaintiffs proposed applying anti-subsidy and anti-dumping duties on Vietnamese tires. However, the plaintiff claims some old policies that Vietnam had applied before joining the WTO but now has changed. In addition, they also cite some new US regulations to expand the scope of complaints.

According to Dung, when US-China trade tensions, some Chinese investors have invested to open factories in Vietnam, Thailand and Indonesia. This makes Vietnam’s tire export turnover to the US from about $150 million / year soared to $500 million / year, which is more than tripled.

Since 2017, the Vietnam Chamber of Commerce and Industry has repeatedly warned localities and ministries to increase the turnover. In the list of risk items, the agency rated the second most at-risk tire.

From this case, he said that there is a shift of FDI investment from countries to Vietnam, which can lead to a sharp increase in export turnover of some industries. From there, he warned: “These are the risks, the reason for importing countries to initiate an investigation. When under investigation, the whole industry will be affected. ”

The DOC said it will also investigate 20 subsidy programs in Vietnam, including tax programs, import substitution subsidies, and currency undervaluation.

A steel factory on the outskirts of Hanoi taken on March 30, 2018

The Ministry of Industry and Trade of Vietnam said it would work closely with relevant Vietnamese agencies to provide the necessary information to the US on subsidized contents including the “currency undervaluation” for the US Department of Commerce to have sufficient grounds and data before issuing a conclusion on the investigation of the case.

In the middle of last month, DOC also initiated an investigation to see if stainless steel products imported from Vietnam are Chinese steel processed in neighboring Southeast Asia to export to the US to evade taxes.

According to a press release issued by the US International Trade Agency (ITA) on May 12, the US Department of Commerce suspected that Vietnamese steelmakers imported flat rolled stainless steel materials from China, then complete processing and then exported to the US.

According to the Ministry of Industry and Trade of Vietnam, this is the case that the US Department of Commerce initiated an investigation based on available information on the allegations that stainless steel products are showing signs of evading trade defense measures that the US are applied to similar goods of China from 2016 with tax rates from 139% to 267%.

Another basis for the US Department of Commerce to initiate this investigation is that the export of stainless steel products from Vietnam saw a significant increase in the period before and after the US imposed tariffs on China. According to ITA’s announcement, the US has conducted anti-dumping and anti-subsidy tax investigations on Chinese stainless steel products in March 2016.

The statement also said that strict US trade law enforcement is the primary focus of the Trump administration.

The US Commerce Department’s decision on May 12 was made amid the Trump administration’s repeated threat to impose new taxes on Chinese goods and to continue to criticize China’s lack of transparency is the cause of the global coronavirus pandemic.

Previously, the US has ruled on imposing tariffs on steel from Vietnam supposedly originating from China. The preliminary ruling was made in December 2017 and finalized in May 2018. The US Department of Commerce then collected anti-dumping duty of nearly 200% and anti-subsidy duty of nearly 260% for cold rolled steel products manufactured in Vietnam using Chinese-made steel substrates. Anti-rust steel from Vietnam also faces anti-dumping duty of nearly 200% and anti-subsidy duty of nearly 40%.

Therefore, according to the data of the Ministry of Industry and Trade of Vietnam, the export of stainless steel products from Vietnam to the US in recent years has continuously decreased from 32,000 tons in 2017 to 25,000 tons in 2018 and continues to decrease to 23,000 tons in 2019. Currently, Vietnam is applying anti-dumping duty on stainless steel flat steel products imported from China with the rate of 17.94% -31.85%.

The Ministry of Industry and Trade of Vietnam recommends that domestic enterprises “cooperate” and “provide sufficient information” related to “material sources, management process” to the US Department of Commerce during the investigation.

The ministry also said that it would closely coordinate with the exporting enterprises and the Vietnam Steel Association “during the investigation of the case and have appropriate support and handling measures including discussion with the US Department of Commerce to clarify the basis of initiating the investigation, in order to protect the legitimate rights and interests of Vietnamese exporters.

Last December, the DOC issued a ruling on imposing tariffs of more than 456% on steel products imported into the US from Vietnam using materials originating from Korea and Taiwan.

Chinese Deputy Prime Minister Liu He and US President Donald Trump during the signing of the US-China Trade Agreement phase 1 at the White House on January 15, 2020

According to the Ministry, the US-imposed steel items originating from the two countries are brought to Vietnam, then through simple processing and then exported to the US.

According to the Ministry of Industry and Trade of Vietnam, the US Department of Commerce initiated its anti-dumping and anti-subsidy investigation after 26 years “demonstrates that the new US government is fiercely fighting against unfair commercial acts to protect the domestic industry.”

According to the Department of Trade Defense, in the alleged subsidy programs, notably, for the first time since the amended US anti-subsidy law was enacted and came into effect in April 2020, the content ” currency undervaluation” issued by the US Department of Commerce. (Translated)