U.S. imposes more duties on steel coming from Asia

by Ike Obudulu Last updated on July 9th, 2019,

The U.S. moved to impose additional duties on steel coming from Asia, expanding a crackdown on what the Trump administration views as unfair trading practices by other countries.

The Commerce Department said Wednesday that it determined that some steel wheels from China are being sold at less than fair value in the U.S. and are being unfairly subsidized, and that it plans to impose duties.

The day before in preliminary rulings, the department said it would impose levies of more than 400% on steel imports from Vietnam, accusing some businesses of shipping products from the Southeast Asian nation to avoid anti-dumping and anti-subsidy duties. Certain products produced in South Korea and Taiwan were being shipped to Vietnam for minor processing before being exported to U.S. as corrosion-resistant steel products and cold-rolled steel, it said.

The department’s trade enforcement actions follow the normal process by Commerce to probe anti-dumping and countervailing duty cases — a different approach than President Donald Trump’s unilateral tariffs on Chinese goods and steel imports over national security concerns. Even so, the moves are likely to add to simmering trade tensions.

Key Differences

A truce agreed by Trump and Chinese President Xi Jinping last week has paved the way for a resumption of talks to reach a trade deal even as key differences remain unresolved. The U.S. is still seeking major concessions such as the demand that Beijing change its economic model and level the playing field so American companies can compete more fairly in China.

The U.S. has also been hardening its rhetoric against Vietnam, one of its major trading partners and an economy that’s benefiting from Trump’s trade war with China. Trump described Vietnam last week as “almost the single-worst abuser of everybody” when asked if he wanted to impose tariffs on the nation.

Vietnam’s Ministry of Foreign Affairs didn’t immediately respond to a request for comment.

The Trump administration has long accused China of dumping its steel and complained that some Chinese shipments circumvent duties by passing through third countries on the way to the U.S.

It’s not surprising companies will try to route products through countries such as Vietnam to dodge higher duties, said Rob Carnell, Asia Pacific chief economist at ING Bank. “It’s a no-brainer,” he said. “You increase the cost and people are going to try and find a way to avoid it. It’s human nature.”

Vietnam says it’s working to reduce its trade surplus with the U.S., and is already cracking down on Chinese manufacturers who are rerouting their goods via the Southeast Asian nation for export to the U.S. in order to bypass higher tariffs.

The U.S. Embassy in Hanoi this week said it’s in talks with authorities and hopes “Vietnam takes steps in the near term to address our concerns in a constructive manner.”

Leave a Reply