Aluminum industry avoids being passive and surprised by lawsuits evading trade defense

Vietnamese goods exported to the United States: What solutions are there to limit investigation and application of anti-avoidance measures? Enterprises must identify risks early and prevent the risk of being sued for anti-avoidance of trade defense measures

Aluminum is currently a strong export product of Vietnam, so this is also a product that often faces trade defense investigations in the export market. Mr. Nguyen Minh Ke - Chairman of the Vietnam Aluminum Association had a discussion about this issue with the Industry and Trade Newspaper.

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Vietnamese aluminum products are facing many trade defense investigations. Photo: Industry and Trade Magazine

Aluminum is a product that regularly faces trade defense investigations, including investigations into evasion of trade defense measures by export markets. Could you share more about this issue?

Aluminum is a versatile material, present in all industries and daily life and is a product with many competitive advantages in the market, so it is facing many trade defense cases in the export market. Recently, the frequency of trade defense investigations in the export market has increased, including anti-trade defense evasion investigations.

In previous years, the number of trade defense investigations against Vietnamese aluminum was quite small, with only 3 cases in 5 years (2018 - 2022) coming from the Australian and Egyptian markets (2021), and the United States (2018). In general, the pressure from these cases is not high. However, in 2023 alone, aluminum will face 3 trade defense cases from the US market.

In May 2023, there was a request for an anti-dumping investigation into solar panel frames originating from Vietnam. Although this case has not been sued by the US, it is still a risk for businesses exporting this product. In particular, in October 2023, there was an investigation into anti-dumping tax evasion against Vietnamese aluminum wires and cables.

In addition, the US is investigating anti-dumping and anti-subsidy on extruded aluminum products originating from 15 countries, including Vietnam, with the current proposed anti-dumping tax rate of 41.84%. The case is currently under investigation and is considered the largest trade defense case in the world aluminum industry.

Mr. Nguyen Minh Ke - Chairman of Vietnam Aluminum Association

What are the difficulties, limitations and losses of businesses in the face of anti-trade defense tax evasion investigations?

To date, the aluminum industry has had two anti-countervailing duty evasion investigations initiated by the United States, one of which involved Chinese aluminum.

Specifically, in 2018, the aluminum profile case was accused of evading trade defense duties related to aluminum from China for some aluminum profile products. The second case, which was just initiated last October, is the investigation into aluminum wire and cable products.

The above cases all stem from the fact that some Chinese businesses cooperated and did business with Vietnamese businesses to import raw materials to process products for export to the United States to avoid trade defense measures that the United States applied to Chinese aluminum.

While the capacity of Vietnamese enterprises to respond to trade defense is not yet able to stand up to protect their rights, they have to seek consulting support to participate in lawsuits with high, even very high costs. The investigation process has caused partners to consider terminating contracts and the consequences are reduced revenue and loss of market. Because when information about the investigation begins, partners are cautious and reconsider future orders to avoid risks and losses due to trade defense taxes.

In addition, when our products are involved in any trade defense cases, the reputation and output of those products will be negatively affected in the international market, causing costly expenses for businesses and negatively affecting legitimate businesses.

Thus, the damage from trade defense lawsuits will threaten the industry's export growth rate. So how is the aluminum industry prepared and ready to respond to trade defense measures, especially investigations against evasion of these measures?

Faced with the challenges of the current protectionist trend, the aluminum industry, as well as other industries, must improve its trade defense capacity for businesses. It is necessary to provide and guide businesses on what trade defense is and the regulations of this measure.

In recent times, the Vietnam Aluminum Association has regularly coordinated with the Department of Trade Defense - Ministry of Industry and Trade to organize training courses on trade defense information; guide businesses to prepare documents and records so as not to be passive and surprised by investigations from export markets. In addition, the Association regularly coordinates to update early warnings from the Ministry of Industry and Trade; monitor trade defense investigations in the world, as well as investigation trends on Vietnamese export goods to have notices and support businesses in responding to lawsuits.

In addition, we always recommend that businesses proactively store data, information, and documents from the past years; prepare knowledge, human resources, and even financial reserves to be ready to participate in trade defense investigations.

In order to avoid the risks of trade defense investigations against the aluminum industry, do you have any recommendations or proposals regarding mechanisms, policies and support activities from competent authorities, including the Department of Trade Defense, Ministry of Industry and Trade?

With the current trend, to avoid the risk of being investigated for trade defense is very difficult, it is necessary to synthesize many solutions. Because, the story of trade defense of the aluminum industry at this time is no longer simply about importing and exporting goods as before. Because in the past few years, there has been a "wave" of investment by Chinese traders in building large-scale aluminum profile factories in Vietnam.

Through investment activities, some foreign traders have taken advantage of the Vietnamese market to “avoid” anti-dumping tax on Chinese aluminum (AD05 case) and partly for export because when these goods are of Vietnamese origin, they continue to “avoid” trade defense tax on Chinese aluminum that many major markets are applying such as the United States, Europe, Australia, etc. Thus, with this trend, the risk of Vietnamese aluminum being investigated for evading trade defense measures is very high and the aluminum industry is currently facing this problem.

Faced with such risks, there needs to be coordination between functional agencies from many ministries and local authorities in controlling foreign investment attraction activities in the aluminum industry. We need to have a suitable mechanism to limit new projects that Vietnamese aluminum enterprises have excess capacity for. In addition, it is necessary to develop a long-term development plan for the aluminum industry, on that basis calling for appropriate investment, avoiding the situation of taking advantage of and "glazing" the origin of foreign enterprises for export, thereby we can protect the interests of the country's young aluminum industry enterprises.

Thank you!

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