Facing potential US tariffs of more than 400 percent on Vietnamese steel exports, China Steel Corp (CSC, 中鋼), Taiwan’s largest steel manufacturer, yesterday said that it is looking into the matter and would react accordingly.
The company’s remark came after the US Department of Commerce on Tuesday said that it would impose duties of up to 456 percent on certain steel products made in Taiwan and South Korea that are shipped to Vietnam for minor processing and then exported to the US.
The department said that it had found corrosion-resistant steel products and cold-rolled steel produced in Vietnam using a substrate of Taiwanese or South Korean origin had circumvented US anti-dumping and anti-subsidy duties.
China Steel Sumikin Vietnam Joint Stock Co (中鋼住金), based in Vietnam’s Ba Ria-Vung Tau Province, uses raw materials from Formosa Ha Tinh Steel Corp (台塑河靜鋼鐵興業), a joint venture by CSC, Formosa Plastics Group (台塑集團) and Nippon Steel Corp, CSC told the Taipei Times.
The Ba Ria-Vung Tau plant specializes in the production of cold-rolled steel coils and hot-dipped galvanized steel coils, as well as other products that might be subject to US duties, CSC said.
The company said that it would adjust raw material sources for products destined for the US to steer clear of the higher tariffs.
The Bureau of Foreign Trade said that it has yet to clarify the matter, but added that steel exports to Vietnam have had slow growth over the past few years, suggesting a weak link in the US’ allegations of Taiwanese companies evading tariffs by processing steel products in the Southeast Asian country.
“From 2015 to last year, exports of hot-rolled steel products increased 17 percent from 1 million tonnes to 1.17 million tonnes,” bureau Deputy Director-General William Liu (劉威廉) told the Taipei Times by telephone, adding that cold-rolled steel exports increased by only 3 percent from 32,000 tonnes to 33,500 tonnes over the same period.
Separately, the Ministry of Economic Affairs said that it is reinforcing efforts to prevent companies from shipping Chinese-origin products to Taiwan before exporting them to the US to avoid US tariffs amid an unresolved US-China trade conflict.
Customs officials have intercepted five such cases since the end of last year, while another shipment of Chinese-origin products was discovered in May, the ministry said.
The ministry said that it has implemented five measures to prevent such scenarios, two of which involve severe punishments, such as canceling a company’s license.
A draft amendment to the Foreign Trade Act (貿易法), which is being reviewed by the Legislative Yuan, would increase fines from NT$30,000 to NT$3 million (US$964 to US$96,370), it added.