Vietnam Seeks Favor with US by Slapping Tariff on Chinese Imports

TAIPEI - Vietnam has imposed anti-dumping tariffs on certain goods from China that were getting around tariffs levied by the United States in its trade dispute with Beijing.

The Southeast Asian country's Ministry of Industry and Trade decided after a 5-month review to levy a temporary anti-dumping tax of 2.46% to 35.58% on several Chinese-origin aluminum products, effective June 5.

Vietnam had emerged as one of the top beneficiaries last year of the Sino-U.S. trade dispute because tariff-weary shippers based in China were tapping the country as an alternative, low-tariff place to manufacture exports headed to the United States.

But some manufacturers were just relabeling products made in China as "Made-in-Vietnam" for trans-shipment to the United States.

Vietnam's anti-dumping tariffs are an efficient response from the Vietnamese side with regards to the U.S. Department of Commerce's anti-circumvention tariffs to be placed on aluminum extrusion exported from Vietnam, Hanoi-based financial market analysis firm SSI Research said in a note Monday.

The note calls the tariffs a very bold move for Vietnam to enact as a country that has emerged as the region's largest beneficiary nation of the (Sino-U.S.) trade war.

Avoiding tariffs in China

Chinese exports of semi-finished aluminum parts doubled in 2018, as the Sino-U.S. trade dispute broke out, to 62,000 tons, SSI Research found. Of that load, a significant quantity is believed to be shipped from China to avoid anti-dumping and countervailing tariffs, the note said.

Some U.S. imports were detected supposedly coming from Vietnam, but were found to be actually Chinese products, which were thereby trying to avoid anti-dumping duties that were applied to Chinese products in the U.S., said Rajiv Biswas, Asia-Pacific chief economist at the market research firm IHS Markit.

Other Asian countries, Indonesia and Malaysia for example, have imposed their own tariffs on Chinese steel imports. Chinese exporters can sell for less than domestic peers in those markets � which are trying to develop their own steel or aluminum industries � because of a supply surplus and massive production scales.

Vietnam is absorbing an outsized share of the China spillover because of a shared land border and relatively low manufacturing costs, said Song Seng Wun, an economist in the private banking unit of CIMB in Singapore. Manufacturing drives the Vietnamese economy, helping it grow at 6%-7% a year.

Favor with Washington

The spike in imports from China had hurt Vietnam's own aluminum industry and put it at risk of more scrutiny by the government of U.S. President Donald Trump, economists believe. The Vietnamese anti-dumping tariffs in place for 120 days will help protect Vietnam's so far stable relations with the Trump Administration as they help stop U.S.-bound trans-shipments from China without paying tariffs.

I do see the Vietnamese trying to be tough on trans-shipments, said Frederick Burke, partner with the international law firm Baker McKenzie in Ho Chi Minh City.

As far as the Vietnamese are concerned, it's just criminal, just taking advantage of their position, smuggling in and smuggling out, he said. It's ruining their reputation and they get no benefit out of it.

Chinese aluminum extrusions, a term for semi-finished parts, are subject to anti-dumping duties on top of the 10% tariff that the United States levies on countries worldwide. Manufacturers in Vietnam buy extrusions from China to make doors, walls and other parts of structures.

Although Trump's government has largely targeted China over trade, the U.S. Treasury labeled Vietnam a possible currency manipulator last month. Vietnam, like China, also runs a trade surplus with the United States, the same condition that sparked the Sino-U.S. spat that's now in its second year with the prospect of escalation later this month.

We certainly can see that the sweeping power of President Trump can (be) fairly extensive, so I think at this point there's less inclination by the Vietnamese to upset the Americans than the Chinese, Song said.

After a series of public consultations, the Ministry of Industry and Trade will decide before year's end whether to extend the tariffs, SSI Research says.

If Vietnam did not impose its own tariffs, Washington would most likely investigate specific companies suspected of exporting Chinese aluminum from Vietnam and order customs officers to pay closer attention to goods with certificates of origin from Vietnam, said Maxfield Brown, senior associate with the business consultancy Dezan Shira & Associates in Ho Chi Minh City.

Source: Voice of America

Vietnam Seeks Favor with US by Slapping Tariff on Chinese Imports

TAIPEI - Vietnam has imposed anti-dumping tariffs on certain goods from China that were getting around tariffs levied by the United States in its trade dispute with Beijing.

The Southeast Asian country's Ministry of Industry and Trade decided after a 5-month review to levy a temporary anti-dumping tax of 2.46% to 35.58% on several Chinese-origin aluminum products, effective June 5.

Vietnam had emerged as one of the top beneficiaries last year of the Sino-U.S. trade dispute because tariff-weary shippers based in China were tapping the country as an alternative, low-tariff place to manufacture exports headed to the United States.

But some manufacturers were just relabeling products made in China as "Made-in-Vietnam" for trans-shipment to the United States.

Vietnam's anti-dumping tariffs are an efficient response from the Vietnamese side with regards to the U.S. Department of Commerce's anti-circumvention tariffs to be placed on aluminum extrusion exported from Vietnam, Hanoi-based financial market analysis firm SSI Research said in a note Monday.

The note calls the tariffs a very bold move for Vietnam to enact as a country that has emerged as the region's largest beneficiary nation of the (Sino-U.S.) trade war.

Avoiding tariffs in China

Chinese exports of semi-finished aluminum parts doubled in 2018, as the Sino-U.S. trade dispute broke out, to 62,000 tons, SSI Research found. Of that load, a significant quantity is believed to be shipped from China to avoid anti-dumping and countervailing tariffs, the note said.

Some U.S. imports were detected supposedly coming from Vietnam, but were found to be actually Chinese products, which were thereby trying to avoid anti-dumping duties that were applied to Chinese products in the U.S., said Rajiv Biswas, Asia-Pacific chief economist at the market research firm IHS Markit.

Other Asian countries, Indonesia and Malaysia for example, have imposed their own tariffs on Chinese steel imports. Chinese exporters can sell for less than domestic peers in those markets � which are trying to develop their own steel or aluminum industries � because of a supply surplus and massive production scales.

Vietnam is absorbing an outsized share of the China spillover because of a shared land border and relatively low manufacturing costs, said Song Seng Wun, an economist in the private banking unit of CIMB in Singapore. Manufacturing drives the Vietnamese economy, helping it grow at 6%-7% a year.

Favor with Washington

The spike in imports from China had hurt Vietnam's own aluminum industry and put it at risk of more scrutiny by the government of U.S. President Donald Trump, economists believe. The Vietnamese anti-dumping tariffs in place for 120 days will help protect Vietnam's so far stable relations with the Trump Administration as they help stop U.S.-bound trans-shipments from China without paying tariffs.

I do see the Vietnamese trying to be tough on trans-shipments, said Frederick Burke, partner with the international law firm Baker McKenzie in Ho Chi Minh City.

As far as the Vietnamese are concerned, it's just criminal, just taking advantage of their position, smuggling in and smuggling out, he said. It's ruining their reputation and they get no benefit out of it.

Chinese aluminum extrusions, a term for semi-finished parts, are subject to anti-dumping duties on top of the 10% tariff that the United States levies on countries worldwide. Manufacturers in Vietnam buy extrusions from China to make doors, walls and other parts of structures.

Although Trump's government has largely targeted China over trade, the U.S. Treasury labeled Vietnam a possible currency manipulator last month. Vietnam, like China, also runs a trade surplus with the United States, the same condition that sparked the Sino-U.S. spat that's now in its second year with the prospect of escalation later this month.

We certainly can see that the sweeping power of President Trump can (be) fairly extensive, so I think at this point there's less inclination by the Vietnamese to upset the Americans than the Chinese, Song said.

After a series of public consultations, the Ministry of Industry and Trade will decide before year's end whether to extend the tariffs, SSI Research says.

If Vietnam did not impose its own tariffs, Washington would most likely investigate specific companies suspected of exporting Chinese aluminum from Vietnam and order customs officers to pay closer attention to goods with certificates of origin from Vietnam, said Maxfield Brown, senior associate with the business consultancy Dezan Shira & Associates in Ho Chi Minh City.

Source: Voice of America