US hits Vietnam with huge duties on steel made with Chinese material

Six US steel manufacturers filed a complaint with the Commerce Department that steel products made in Vietnam are using Chinese material in an attempt to circumvent US import duties. (AFP Photo)

The products will be subject to US punitive duties of up to 265 per cent of their value, the Commerce Department said in a statement, yet another in a series of aggressive trade enforcement steps by President Donald Trump's administration, many targeting China.

US imports from Vietnam have skyrocketed since the US imposed duties on the Chinese product two years ago, indicating companies are circumventing US duties by passing through Vietnam, the Commerce Department said.

The duties on the Chinese product were designed to compensate for product produced at below cost and dumped into the US market.

Since then, imports of corrosion-resistant steel from Vietnam have jumped to US$80 million a year from just US$2 million, while cold-rolled steel surged to US$215 million from US$9 million, according to the statement.

The duties imposed are a preliminary finding in the complaint filed by six US steel manufacturers, and the department will announce a final decision in February. Importers of the product from Vietnam can file for an exemption from the duties if they can prove the material used in production originated outside of China.

Washington has stepped up adversarial trade actions with China since Trump took office in January on a nationalist economic agenda, imposing duties on Chinese aluminum foil and plywood, among other goods.

Beijing reacted harshly last week after Washington opened an anti-dumping probe of Chinese common aluminum alloy sheet worth hundreds of millions of dollars annually.

The Trump administration in April also launched national security investigations into Chinese aluminum and steel imports, warning the country's overcapacity threatened to undermine producers crucial to US defence needs.

Trump also has promised to reduce bilateral trade deficits with major trading partners.

However, the Commerce Department reported earlier Tuesday that US imports of goods from China were the highest on record in October, helping drive up the bilateral trade gap by US$2.1 billion to US$31.9 billion for the month.