Trade Cases

Letter to the Editor: Question About Circumvention Complaints
Written by John Packard
September 22, 2016
We might as well get the debate started. The circumvention complaints against Vietnam have prompted comments and a healthy discussion is needed as the industry tries to wrap its collective mind around the facts of the latest request of the US Department of Commerce to stop Vietnamese exports of cold rolled and coated steels. We received the following letter to the editor earlier this evening.
It was reported today that two US steel producers have requested that the DOC find that China is circumventing anti dumping and countervailing duties on cold rolled coils and coated material by processing HRC in Vietnam. More detailed filing is said to follow.
Now that alone wasn’t that big of a news to me but what caught my interest was the statement that “China is shipping its product into Vietnam for minor processing “. For many years the emerging steel producing nations like Indonesia, Malaysia and Vietnam have been supplied by the Japanese and the Koreans with hot rolled coils and cold rolled coils for conversion into coated products or pipe and tubing. The fact that the Chinese are supplying Vietnam with hot rolled coils is only logical, they are the cheapest producers. They are supplying billets to many customers in the world who find it to be cheaper to import the billets than making them themselves. What’s wrong with that?
For many years the Koreans imported steel from other countries explicitly for the conversion into other products for export because they couldn’t compete anymore if they had to buy from domestic mills. This created thousands of jobs in Korea in the manufacturing industry and enabled many companies to export their products worldwide and at the same time kept the domestic price level fairly high.
Maybe an idea which we should try here in the USA?
We welcome your comments which can be sent to SMU at: info@SteelMarketUpdate.com

John Packard
Read more from John PackardLatest in Trade Cases

Canada, mirroring the US, plans to take harder line on imported steel and aluminum
The actions, which includes tariffs, are necessary to protect the Canadian market from global overcapacity. They are also needed because other countries have redirected material to Canada as a result of higher US tariffs, Carney said.

Industry cautiously optimistic despite lack of steel specifics in US-UK trade deal
Details of a new tariff-rate quota on US imports of British steel are lacking in the new US-UK trade deal.

Mexico shuts down steel importer amid trade talks
The Mexican government shut down two plants and warehouses operated by US-based LAU Industries.

US and Canada talk trade, market contemplates fate of S232 steel protections
Trade talks are progressing between the US and the market is contemplating the future of Section 232 tariffs.

Leibowitz: Tariffs are the trade version of going nuclear
In short, when tariffs go up, jobs in consuming industries go down. There is conclusive evidence from past actions: safeguard tariffs in 2002 and Section 232 tariffs in 2018. It is happening again in 2025. The Trump administration wants foreign producers (and US retailers) to absorb tariff increases (except in antidumping cases, where foreign absorption of tariffs is illegal).