Planned HRC steel import duty hike aborted
Planned HRC steel import duty hike aborted
The Ministry of Finance, bowing to strong opposition from steelmakers and industry experts, has abandoned a planned increase of the Most Favored Nations import duty on hot-rolled coil (HRC) steel from 0% to 5%.
The ministry included the duty increase in a draft government decree to prevent the potential influx of steel from China given the ongoing trade conflict between China and the United States.
Vietnam imports over eight million tons of HRC steel annually and 40% of it comes from China. Without the import duty, the local steel market will encounter uncertainty due to the influx of Chinese HRC steel, according to the ministry.
Also, an increase in the Most Favored Nations duty on steel to 5% would potentially raise the State budget collection to over VND3 trillion. However, this would be offset by steelmakers sourcing steel supplies from South Korea and ASEAN countries that enjoy a 0% Vietnamese import tariff.
Responding to the proposal, the Vietnam Steel Association (VSA) had earlier petitioned the ministry to block the tax hike on the product, as it will create additional obstacles for local manufacturers of cold-rolled steel, galvanized sheet steel and steel rolls amid the hardships faced by the local steel sector.
The association explained that the steelmakers will face restricted steel supplies, while domestic production meets only 10%-13% of the market demand. Further, the tariff increase will result in higher prices for steel products, thus lowering the competitiveness of Vietnamese galvanized sheet steel, VSA said in the petition.
Therefore, the ministry’s move to remove the proposal will avoid upsetting the business operations of the sector.
On behalf of VSA, chairman Nghiem Xuan Da praised the ministry’s decision, stating that all VSA members were pleased with the decision in the context of the escalating trade tension and the rise of safeguard measures.
According to the VSA representative, HRC steel is an important input material for manufacturing a wide range of products in the industry.
VSA expects the Government to continue to support local steelmakers and protect local consumers’ interests to maintain the sustainable development of the sector, said the chairman.
