Continuous use of trade defense measures

Thailand’s Department of Foreign Trade (DFT) has just announced an anti-dumping duty of 30.91% on hot-rolled steel coil (HRC) with added alloy from China, Kallanish noted. This is an expansion of the anti-dumping measures (AD) that the Thai government is applying to Chinese hot-rolled steel coil.

Previously, the DFT had launched an anti-circumvention investigation on alloy hot-rolled steel coils from 17 manufacturers in China from September 16, 2023. The ministry is investigating whether these products evaded existing anti-dumping duties by adding alloys to the hot-rolled steel coils and importing them under different HS codes.

According to the Southeast Asian Iron and Steel Association (SEAISI), Thailand's hot-rolled coil production output in 2022 reached 2.3 million tons, meeting 40% of total consumption demand (5.4 million tons), the rest must be imported. However, from 2021, Thailand will still impose anti-dumping tax on non-alloy hot-rolled coil imported from 18 countries and territories, of which the tax rate applied to Chinese HRC is 30.91% to protect the domestic steel industry.

Thailand's story is not an isolated one. In recent years, as tariff barriers have been reduced, countries have frequently applied trade remedies. Vietnamese goods have also been under this pressure when exporting to other countries. Even with steel products, the Trade Remedies Authority (Ministry of Industry and Trade) said it had received information that the European Commission (EC) had received a complete and valid dossier requesting an investigation to apply anti-dumping measures on non-alloy or alloy hot-rolled steel coils imported from Vietnam.

At the workshop “Proactively applying and responding to trade defense measures in international trade” on the afternoon of August 6, organized by the Management Board of the WTO Chair Program Phase 3 at the Foreign Trade University, experts also warned that countries are increasingly applying trade defense measures on imported goods, which threatens domestic production.

Listing the trends being applied by countries, Dr. Hoang Ngoc Thuan, Deputy Head of the WTO Chair Program Management Board, Phase 3, said: The recent trend that many countries are applying is anti-tax evasion. The second trend is to apply both anti-dumping and anti-subsidy.

The third trend is when it is discovered that the exported goods come from many different countries, but the export volume is not large, so suing many countries at the same time will meet the minimum quantity requirement. The fourth trend is the domino effect, that is, when an exported goods is initiated by a country for trade defense investigation, it may lead to some other importing countries also applying similar trade defense measures to that goods based on the successful lawsuits of other countries.

“Recently, there is a fifth trend that they apply some special measures. For example, since 2018, the US President has applied Section 232 of the Trade Expansion Act, when imported goods have an impact on national security, the tax rate is applied immediately. Since applying that, the US has applied it to a number of goods, of course the tax rate is relatively high, from double digits or more,” Mr. Hoang Ngoc Thuan pointed out.

Emphasizing that we must protect what we produce, Mr. To Thai Ninh, Head of the Anti-dumping and Subsidy Investigation Department, Department of Trade Defense (Ministry of Industry and Trade) said: One of the major effects of anti-dumping measures is to help us restore a healthy and fair competitive environment. Because anti-dumping and anti-subsidy measures help us prevent dumping and the sale of goods into our country that are subsidized by the exporting country.

This subsidy gives those goods a certain competitive advantage over the goods we produce domestically. They are subsidized so their prices are very low and cause negative impacts on production, we cannot sell our goods, losing out at home.

“When we apply trade remedies, we prevent unfair competition… Every year, applied trade remedies help increase the state budget by 1,500-2,000 billion VND from trade remedy taxes,” said a representative of the Dumping and Subsidy Investigation Department.

Business leaders must be ready

Mr. Le Sy Giang, CEO of GH Consults (GHC), shared: The starting point of PVTM measures is the competition between manufacturers of different countries. With such a starting point, when the two sides enter the "war" in a market like Vietnam, we must prepare documents, as well as effectively utilize this legal tool.

Mr. Giang noted that before going into details related to business data records, the first thing to consider is the spirit of the business leaders because this is a "war" between Vietnamese businesses and foreign businesses. Business owners must be ready to fight with foreign businesses, otherwise it will be very difficult because this is not the story of a single business, but the story of the industry. For example, when the Vietnamese steel industry competes with the steel industry of other countries, business owners must determine that we must be determined to do it. Without that spirit, nothing can be solved.

Participating in a PVTM lawsuit is not simple, because this is a very deep legal tool, collecting data not only from 1 business but many businesses in the industry, takes a lot of time.

“We must confirm that the data set is honest, and secondly, the business data must be prepared in the correct form, format, and on time. If we file a lawsuit and it is messy, it will not work. If we declare truthfully, it will be easy to defend. If what you say is not true, it will be very difficult to defend,” Mr. Giang advised businesses.

The steel industry's 'double shock' Some Vietnamese steel products are at risk of being subject to anti-dumping investigations by the European Commission, including hot-rolled steel coil. Meanwhile, in the domestic market, imported goods continue to flood in.