9 businesses worried about difficulty surviving both "home" and "abroad"

During a meeting with investors at Hoa Phat Dung Quat Steel Integrated Complex at the end of March 2024, General Director of Hoa Phat Group (HPG) Nguyen Viet Thang said that this company and Hung Nghiep Formosa Ha Tinh Steel Company have submitted an application to initiate an anti-dumping investigation on HRC steel products imported from China to Vietnam. According to these two companies, this is a move to protect domestic businesses and the domestic market, especially when steel import turnover from China to Vietnam is surging and accounting for a large proportion.

According to data from the General Department of Customs and Report of the Vietnam Steel Association, from in 2022 and 2023 until the first months of 2024, steel imports into Vietnam soared in quantity. In particular, Vietnam mainly imports steel of all types and products from China, accounting for 62% of the country's steel imports.

However, reacting to this information, 9 Vietnamese galvanized steel and steel pipe enterprises including Hoa Sen Group (HSG), TVP Steel, Dong A Steel, Nam Kim Steel, Phuong Nam Steel, Pomina Steel, Vina One Steel, Viet Nhat Steel and Nam Hung Metal agreed to send an official dispatch to the authorities stating that there is no legal basis and is not consistent with market developments when requesting to initiate an anti-dumping investigation on HRC steel products imported from China.

Discussing this issue, Mr. Vu Van Thanh, Deputy General Director of Hoa Sen Group, said that the total demand for HRC steel is from 11-13 million tons/year, but the steel output of the two HRC steel producers (HPG and Formosa Ha Tinh) can only meet 30% of demand, the remaining 8 million tons must be imported from many countries, not only from China. It is assumed that if anti-dumping tax is passed, steel businesses will suffer serious impacts in both the domestic and export markets.

Firstly, the cost of finished galvanized steel products will rise due to higher prices of domestic HRC steel. Currently, the price of HRC steel is 10-20 USD/ton higher, sometimes 40-50 USD/ton higher than the price of imported HRC products. Secondly, high prices will make it difficult for businesses to compete on price upon export. For example, when exporting HRC products to Canada, businesses are subject to anti-dumping tax. If anti-dumping tax is added, a steel product will be taxed twice, and it will not be able to compete, leading to losing the export market. "You lose at home, you lose abroad, so that Vietnamese steel businesses cannot to survive and are gradually going bankrupt," Mr. Vu Van Thanh emphasized.

In addition, the dispatch of 9 steel enterprises also states that the sharp increase in HRC imports from China to Vietnam is not a condition for initiating an anti-dumping investigation because it is not in accordance with the provisions of this Law on Foreign Trade Management. On the contrary, the increase in the amount of HRC imported from China to Vietnam is inevitable because the domestic supply of HRC fails to meet demand.

Besides, according to the market rule of supply and demand, any country that can produce good quality HRC at a reasonable price will export more HRC than other countries. In 2023, HRC produced by Chinese enterprises has good quality and reasonable price, so the amount of HRC imports from China will increase more than HRC imports from other countries, which is completely consistent with the market rule of supply and demand.

Need to be transparent and objective

Regarding this issue, economic expert Dr. Vu Dinh Anh said that imposing anti-dumping tax on a product is not a simple story but requires specific evidence as well as clarification of the story if how much tax will be imposed, for how long, and for what purpose?

From a legal perspective, Lawyer Nguyen Tien Lap, Arbitrator of the Vietnam International Arbitration Center (VIAC), said that the fact that two businesses submitted the application to the Ministry of Industry and Trade to initiate an anti-dumping action has a legal basis. However, the decision to impose taxes or not must be based on reasonableness for both the applicants and the goal of protecting the market because when applying protective measures, there will be side effects that affect consumers as well as the domestic construction and real estate markets.

Regarding this issue, Mr. Chu Thang Trung, Deputy Director of the Trade Defense Department (Ministry of Industry and Trade), said that the Ministry of Industry and Trade is evaluating the completeness and validity of the application. The Department is asking the applicants to add documents to ensure validity. According to a representative of the Ministry of Industry and Trade, based on the provisions of the Law on Foreign Trade Management, in case a business sees signs of dumping of goods imported into Vietnam, causing damage to the domestic manufacturing industry, representatives of the domestic manufacturing industry are allowed to submit an application of anti-dumping measures.

He also stated that, based on the opinions and evidences of all relevant parties and ensuring the legitimate rights and interests of businesses in this case, the investigation agency will review dossiers in accordance with the provisions of law to report to the Minister of Industry and Trade to decide whether to investigate or not investigate. The investigation and handling process will be conducted openly, transparently and objectively.
 

Source:Custom News

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