Countervailing duty is an import tax imposed on certain goods in order to prevent dumping or counter export subsidies, while antidumping duty is penalty imposed on suspiciously low-priced imports to protect local industry from unfair competition.
Customs and Border Protection Authority of the U.S. will be guided to collect cash deposits on steel products delivering from Vietnam originated in China.
Specifically, for corrosion-resistant steel, the anti-dumping duty will be collected at 199.43 percent and the countervailing duty is going to be securing at 39.05 percent.
Additionally, for cold-rolled steel, the anti-dumping duty and countervailing duty will be at rates of 199.76 percent and 256.44 percent, respectively.
Steel products imported into the U.S. were subjected to a tax of 25 percent since the beginning of March 2018, after President Donald Trump signed the decree on the application of aluminum and steel tariffs.
As a result, the tariffs imposed on Vietnam steel products originated from China will go up to rates of 200 percent.
Importers and exporters of goods producing in Vietnam or a third-country have the option of seeking an exemption from the tariff by certifying that the origin of the products is not from China.
The global steel industry is grappling with a surplus production capacity mostly originated in China, which leads to the vast reduction in steel prices.
The main cause of this situation is due to most of steel products from China are being shipped to other countries before exporting to the U.S. to avoid tariffs.
According to the U.S. Department of Commerce after anti-dumping duties were imposed on Chinese steel products in 2015, shipments of corrosion-resistant steel from Vietnam to the U.S. increased from $2 million to $80 million whilst shipments of cold-rolled steel grew to $215 million per year from $9 million.
The decision indicated a victory for the U.S. steel makers, who won antidumping and countervailing duties against Chinese steel in 2015 and 2016 only to see shipments flood in from elsewhere.