Many types of Vietnamese steel exported to the EU will be subject to one more year of tariffs

Many Vietnamese steel product groups are subject to tariff quotas until the end of June 2024.

The World Trade Organization (WTO) Safeguards Committee said that the European Union (EU) has extended its safeguard measures on imported steel in the form of tariff rate quotas (TRQs) for a number of products for another year (effective from July 1, 2023 to June 30, 2024). TRQs are measures that competent state agencies apply to decide on the quantity, volume, and value of imported or exported goods that enjoy a more preferential tax rate than the out-of-quota tax rate.

The European Commission (EC) believes that the domestic industry will continue to suffer serious damage if the measures are not extended. Steel producers in the bloc are still adjusting to the increase in steel imports. Therefore, the extension of the safeguard measures on imported steel is necessary.

The EC maintains a combination of individual quota allocations for each country and a common quota for the remaining countries. The out-of-quota tariff is 25%. The duty-free quota volume continues to increase by 4% compared to the period 1/7/2021 - 30/6/2023.

Vietnam is subject to common TRQs with other countries on a quarterly basis with 8 product groups including: hot-rolled steel plates, electrical engineering steel plates, galvanized steel plates, organic coated galvanized steel plates, cold-rolled stainless steel plates, large steel pipes, and other steel pipes.

For other steel product groups, Vietnam is excluded according to the criteria of developing countries with insignificant import market share (less than 3%).

In case the market share of imports of another group of steel products from Vietnam to the EU exceeds 3%, this group will be included in the list of TRQ applications in the annual administrative reviews. In addition, Vietnam is not allowed to apply quotas specifically to any group.

Previously, in March 2017, the EC initiated a safeguard investigation on imported steel products. On July 18, 2018, the EC decided to apply temporary safeguard measures on imports of a number of steel products classified under 23 product categories for 200 days.

In early 2019, the EC applied formal safeguard measures to 26 of the 28 product categories under investigation. The out-of-quota tariff rate is 25%, with different quotas depending on the product type and origin. On 1 July 2020, the duty-free quota was increased by 5%. This measure is valid until 30 June 2021. After a period of 3 years, the EU continued to extend this safeguard measure for the first time, but relaxed it by increasing the tariff quota level for all groups to 4% for the periods 1 July 2022 - 30 June 2023 and 1 July 2023 - 30 June 2024.

Duc Minh

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