EU warns of applying safeguard measures on 3 Vietnamese steel products

The Trade Defense Department (Ministry of Industry and Trade) said that galvanized steel sheets, conductive steel sheets, and galvanized or tin-coated steel sheets and chromium are at risk of being subject to official safeguard measures by the EU market after February 3, 2019, if strong export growth continues in the coming months.

Based on EU import and export data updated to June, the group of products at high risk of being subject to official safeguard measures is steel plate coated or coated with other materials (painted, varnished, plastic coated, etc.) with HS codes: 7210 70 80, 7212 40 80.

Currently, the import proportion of this item from Vietnam has exceeded 3%, with a high risk of the EU applying official safeguard measures after February 3, 2019 if it continues to grow in the coming months. The EU quota currently applied to all countries exporting to the EU is 414,324 tons from July 19, 2018 to February 3, 2019.

For tin-coated/plated steel sheets, chromium with HS codes 7209 18 99, 7210 11 00, 7210 12 20, 7210 12 80, 7210 50 00, 7210 70 10, 7210 90 40, 7212 10 10, 7212 10 90, 7212 40 20, the import proportion from Vietnam remains below 3%, however, Vietnam is still at risk of being officially applied safeguard measures by the EU after February 3, 2019 if there is strong growth in the coming months. The EU quota currently applied to all countries exporting to the EU is 367,470 tons from July 19, 2018 to February 3, 2019.

Previously, on March 26, the European Commission (EC) decided to initiate an investigation to apply safeguard measures on 28 groups of imported steel products due to concerns that increased imports could cause damage to the domestic manufacturing industry.

Based on the results of the preliminary investigation, the EC has decided to apply provisional safeguard measures in the form of tariff quotas on 23/28 groups of imported steel products under investigation. The tariff rates in the quotas are equal to the current MFN tariff rates.

Imports exceeding the quota will be subject to an additional import duty of 25%. The provisional safeguard measure will be effective for 200 days (from 19 July 2018 to 3 February 2019). After that, based on the final investigation results, the EC will decide whether to apply definitive safeguard measures.

In the warning issued by the Trade Defense Department on July 31, the steel group identified as having a high risk of being subject to official safeguard measures is steel plate coated/plated with other materials. The product group at risk of being subject to official safeguard measures is steel plate coated/plated with tin and chromium.

However, based on the provisions of Article 9.1 of the WTO Safeguard Agreement on excluding developing countries from the measure if their import market share is insignificant (less than 3%), Vietnam is only subject to tariff quota measures for 3/23 product groups, including alloyed and non-alloyed cold-rolled steel; metal-coated steel sheets and cold-rolled stainless steel sheets and bars.

For the remaining 20 product groups, temporarily imported products from Vietnam to the EU are not subject to quotas and are not subject to the additional over-quota tax rate of 25%. However, if during the period of application of temporary safeguard measures, imports of these products from Vietnam increase by more than 3%, Vietnam will face the risk of not being excluded when the EC decides to apply official safeguard measures (after February 3, 2019)./.