Vietnamese steel association seeks exemption from 'absurd' Trump tariff

By Nguyen Ha   May 2, 2018 | 12:54 pm GMT+7
Vietnamese steel association seeks exemption from 'absurd' Trump tariff
A man welds a steel bed at a furniture factory outside Hanoi. Photo by Reuters/Kham

Local firms are concerned they will be unable to compete with countries where the U.S. does not imposes the fees.

Vietnamese steel firms have asked the government to file a complaint with the World Trade Organization (WTO) regarding a recent tariff on steel imports imposed by the United States.

Ho Nghia Dung, president of the Vietnam Steel Association (VSA), has requested three government bodies to officially respond to the “absurd” 25 percent steel tariff on steel imports and 10 percent tariff on aluminum products imposed by U.S. President Donald Trump in March.

In the letter, the VSA asked Vietnamese ministries to file a complaint to the WTO concerning the tariff, similar move to a challenge made by China in April. The letter was addressed to the Government Office, the Ministry of Industry and Trade and the Ministry of Foreign Affairs.

The VSA also requested exemption from section 232 of a 1962 U.S. law that allows safeguards to be raised based on “national security”. 

From 2012 to 2017, Vietnam exported about 2.48 million tons of steel to the U.S. and imported about 2.52 million tons from the country, a roughly equal trade balance.

Last year, Vietnam exported 567,000 tons of steel to the U.S., which was down by 43 percent compared to 2016. Vietnamese steel products only account for 1.66 percent of total U.S. steel imports.

“For these reasons, the U.S. government's investigation into Vietnamese steel on matters of 'national security' is absurd,” the VSA said.

The 25 percent tariff will have a negative impact on Vietnam’s steel industry and might even result in Vietnam losing the entire U.S. market, the VSA said. 

Turnover with the U.S. could quarter in the 2-3 years as Vietnamese steel firms struggle to compete with their counterparts from countries where taxes are not imposed, the VSA said.

Millions of Vietnamese steel workers may be affected by the tariff, as the majority of businesses depend on manufacturing to recover capital and pay interest on loans, the association said.

On Monday, Trump postponed the imposition of steel and aluminum tariffs on Canada, the European Union and Mexico until June 1, and reached agreements for permanent exemptions for Argentina, Australia and Brazil.

For now, Vietnam, along with China, Russia, Japan, India and many other countries, will still be affected by the tariffs.

 
 
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