A steel factory in Vietnam. Photo: Diep Duc Minh
The Ministry of Industry and Trade announced on Tuesday that additional tariffs will be levied on imported steel products as a temporary safeguard measure against cheap imports which have allegedly threatened the local industry.
The new tariffs, 23.3 percent for steel billets and 14.2 percent for steel rods, will take effect this March 22 and end as late as October 7.
They, however, will not be applicable for products from developing countries such as Cambodia and Indonesia, whose steel exports to Vietnam account for less than 3 percent of the country's total imports.
Vietnam is already imposing trade tariffs of up to 20 percent to these products.
The ministry said it will continue with an investigation launched at the end of last year into possible injury caused by steel imports.
Initial findings suggested that the recent surge of imports has caused "serious damage" to local production of steel billets and rods, according to the ministry's latest announcement.
Imported steel billets have undercut local products since 2014, especially after prices of imports were lowered by 30 percent last year, it said.
Local producers posted "near zero" profits last year as they had to sell their products cheap, the ministry said.
Vietnam imported more than 592,000 tons of steel billets in 2014, up 69.7 percent from the previous year, the ministry reported, citing figures from the customs.
Last year imports surged 218 percent to nearly 1.89 million tons, compared to an increase of 5-10 percent of the sales of domestic products.
Similar findings were reported about steel rods whose imports had outnumbered local sales since 2012.
More than 1.28 million tons of steel rods were brought into Vietnam last year, up 47 percent from 2014, while local producers posted increases of 15-25 percent in sales.
The market shares of local steel billets and rods have continuously shrunk since 2013, while imported products' shares have kept increasing, the ministry said.
It said local producers saw rises in their stockpiles, especially last year when the stockpile of steel billets grew 37 percent, and rods 39 percent.
The ministry's investigation has divided local steel producers with four major companies, Hoa Phat, Southern Steel, Thai Nguyen, and Vietnam-Italy Steel, claiming that cheap imports have deeply hurt their business.
Many others, on the other hand, called for a halt to the investigation, saying that unlike big companies they depend on imported steel billets for production and high duties will increase their input costs, which, in turn, will squeeze profit margin.