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Increased duties to protect domestic steel enterprises in Vietnam have been effective for more than one month but they seem to have caused more problems for the market, especially consumers and construction projects, Vietnam News Agency reported today.
Vietnam deployed anti-dumping measures on stainless steel products from China, Indonesia, Malaysia and Taiwan in September 2014 and revised the duties on May 14, 2016. It was meant to protect domestic steel production but it is also hard for enterprises to reduce steel prices, passing the cost on to consumers.
The decision in May lowered duties for imported steel products from Malaysia, but taxes remain for Taiwan (13 to 37 percent), and duties for China and Indonesia nearly quadrupled to 17.47-25.35 percent and 13.03 percent, respectively.
On Cat Linh Street, known as the furniture center of Hanoi, the prices of household appliances and equipment have not escalated significantly, but shop owners anticipate that they could rise by 10 to 15 percent.
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Vietnam offers trade remedies on stainless steel but it seems to have had several counterproductive impacts on customers and domestic customers. Photo by Reuters/Fabian Bimmer |
Tran Anh Tu, a salesperson at a furniture shop on Cat Linh Street, that after the new anti-dumping measures, prices will likely rise 10 percent due to increased input costs.
In March and April, the price of steel and imported global steel products grew sharply as domestic construction demand rose with new real estate projects. Prices are also projected to continue to rise this year.
Due to the inflated prices of construction materials like steel and chrome steel, Nguyen Tuan Vinh, a Hanoi resident, said he was worried about his plan to build a house at the end of this year..
“The initial estimated cost was about VND500 million ($22,457), but rising steel prices could add an extra VND100 million ($4,491) onto the bill,” Vinh said.
For steel enterprises, the new anti-dumping measures could even have negative impacts on domestic firms if they are forced to cut shipments of imported stainless steel.
Deputy General Director of Daiduong International JSC Pham Quoc Vu said that the significantly high level of duties applied on stainless steel products seriously affects local firms. Customers will suffer the most when prices of steel products like tubes, pipes, pans, basins, trays, tables and chairs rise from 10 to 15 percent.
A representative from a steel fabrication firm said higher duties will take a chunk out of existing orders.
Deputy General Director of Son Ha Group Dam Quang Hung underlined that the opportunity for enterprises to import steel will dwindle. This could lead to a monopoly in the domestic market and have a direct impact on high-end customers.
Chairman of the Vietnam Steel Association Ho Nghia Dung said the decision to apply anti-dumping measures has protected domestic production but it has caused difficulties for several enterprises that import stainless steel. The association will discuss this issue with state authorities.
“The function of the association is to safeguard domestic production and if trade remedies protect certain enterprise groups’ interests, other groups could be at a disadvantage. Besides improving quality, price, competitiveness and corporate governance, enterprises need to adjust and cooperate with each other in domestic distribution chain to share the benefits,” Dung said.
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> Global steel prices surge - Vietnam follows suit
> U.S. finishes first round of Vietnamese steel anti-dumping investigation
