Racing to import wide-gauge steel from China to avoid taxes?

Previously, according to the anti-dumping tax order, steel products originating from China, with a thickness of 1.2 - 25.4mm and a width of no more than 1,880mm, will be subject to an anti-dumping tax of 23.1 - 27.8% and will last for 5 years.

Therefore, many domestic steel manufacturing enterprises have circumvented this regulation by importing steel products with a width of over 1,880mm to avoid taxes.

Cheap imported goods are preferred?

Responding to Tuoi Tre, some businesses using hot-rolled steel as input material for production affirmed that with the applied tax rate, businesses are almost unable to import steel raw materials from China, so they have found ways to circumvent this regulation.

Because in reality, if taxes are added, imported goods will not be able to compete on price, even though the final price is paid by consumers.

"Therefore, we import HRC steel with a width of over 1,880mm, combined with a "slitting" machine over 2,000mm, to make full use of raw materials, optimize production to reduce costs. Importing raw materials to meet production needs is also a real need of businesses when domestic supply is not enough," said a representative of a steel company in the North.

According to research, to find alternative sources of goods, many businesses have switched to importing HRC steel products with HS codes different from the above taxed list to avoid being subject to anti-dumping tax.

For steel coils with a width of over 1,880mm, businesses use "slitting" machines, which are machines that cut steel to the exact size required (mainly under 1,800mm) to meet production needs.

However, a steel company in Hung Yen admitted that it imported hot-rolled steel with a width of over 1,880mm to cope with the tax order. In fact, hot-rolled steel with a width of 1,500 - 2,000mm is not much different and businesses can use different sizes, optimizing efficiency through design, production line machinery and "size-reducing" machines.

Although according to some steel companies, not all units importing wide-gauge steel and using "strip-reducing" machines are effective. Having to import wide-gauge steel and having to process it through "strip-reducing" machines also causes work and extra manpower with the remaining steel. However, because imported goods are cheaper, this is still the choice of many manufacturers.

"But this is not a big problem, the main thing is to ensure the supply of raw materials for production. In fact, since the tax order, domestic purchasing prices have not fluctuated too much. Although they are on an upward trend, they mainly follow world price movements and the final price is paid by consumers, but we also have to ensure competitiveness," said the business.

Increased monitoring of imported hot-rolled steel shipments

Talking to us, a steel industry expert said that the fact that businesses are racing to import steel with a width of over 1,880mm as production input to replace HRC steel with a size of under 1,880mm will have a direct impact on the domestic manufacturing industry as well as the economy, because cheap steel products continue to flood into Vietnam, due to not being subject to anti-dumping tax.

"HRC products are input materials for many industries such as steel pipes, galvanized iron, household appliances...

The influx of cheap wide-gauge steel into Vietnam to replace products with a gauge of less than 1,880mm will cause major disruption to downstream product prices, create unfair competition, distort the domestic market, seriously affect the domestic HRC production industry, and cause tax losses to the State," he warned.

More worryingly, according to experts, the sharp increase in the quantity of wide-sized HRC hot-rolled steel imported into Vietnam also risks affecting the identification of Vietnamese origin goods.

Because HRC steel accounts for 80 - 90% of the cost structure of downstream steel products, while many large steel importing countries such as the US, Canada and some EU countries... require downstream steel products to be manufactured from HRC products of domestic Vietnamese manufacturers.

"Therefore, allowing large-sized HRC steel over 1,880mm into Vietnam risks being requested by other countries to investigate origin evasion and downstream steel product manufacturers are at risk of being implicated," an expert warned.

Speaking with us, Mr. Chu Thang Trung, Deputy Director of the Department of Trade Defense (Ministry of Industry and Trade), said that he had received information related to the increase in imports of hot-rolled steel products with a width of over 1,880mm with the aim of evading the application of anti-dumping measures.

Therefore, this agency has also sent a supplementary survey questionnaire, requesting import companies to provide additional information on the import, use and sale of hot-rolled steel products with a width of over 1,880mm.

"We also sent a dispatch requesting the Ministry of Finance (Customs Department) to consider measures to strengthen supervision of imported shipments of hot-rolled steel products declared to have a width greater than 1,880mm to limit the possibility of fraud by traders through false declaration of product size to evade anti-dumping tax," Mr. Trung informed.