Vietnam has officially imposed import tariffs on steel billets and steel bars after more than four months of applying temporary safeguard measures.

The Ministry of Industry and Trade (MoIT) released a decision on July 18 applying additional tariffs on imported steel products as an official safeguard measure against cheap imports that threaten domestic steel producers.

The decision will be imposed on alloy and non-alloy steel ingots and steel rods and take effect from early next month and last for four years.

Experts believe the new tariffs will benefit large producers in the domestic market such as the Hoa Phat Steel JSC, the Southern Steel Co. Ltd., the Thai Nguyen Iron and Steel JSC and the Vietnam-Italy Steel JSC but not consumers.

MoIT explained that the safeguard tariffs of 23.3 per cent on steel ingots and 14.2 per cent on steel rods will only temporarily protect local manufacturers of both products.

No enterprise dominates the market, according to MoT. The tariffs were imposed after it conducted an investigation into the imports of steel ingots and steel rods in the wake of complaints raised by local steel producers due to a surge in imported steel.

There are now 14 large companies in Vietnam’s steel market with total production accounting for nearly 73 per cent of the total (Hoa Phat holds the most, at 25 per cent), along with hundreds of smaller enterprises manufacturing steel ingots. Twenty-one large enterprises account for nearly 93 per cent of the market share in steel rods, along with dozes of smaller enterprises.

With an HS code of 9811.00.00, the safeguard measure will only be applied on imported products leading to three original HS codes, including 7224.90.00, 7227.90.00 and 7228.30.10 and will not be imposed on remaining codes. With imported steel rods, the safeguard measure will be applied under additional imported tariffs.

The safeguard tariff of 23.3 per cent will imposed on steel ingots for one year, until March 21, 2017, then fall to 21.3 per cent, 19.3 per cent, 17.3 per cent over the following three years.

The tariff on steel rods imported into Vietnam will be 14.2 per cent until August 1 this year then increase to 15.4 per cent to March 21, 2017. Over the subsequent three years it will fall to 13.9 per cent, 12.4 per cent, 10.9 per cent.

From March 22, 2020, tariffs on both steel ingots and steel rods will be zero per cent if no extension is made.

The safeguard duties will not be applicable on products from developing and under-developed countries whose steel exports to Vietnam do not exceed 3 per cent of their total and if the total imports from these countries and territories does not exceed 9 per cent of total imports to Vietnam.

The amount of imported steel ingots increased from more than 466,000 tons in 2012 to 1.5 million tons in 2015 and the amount of imported steel rods rose from 387,000 tons in 2012 to 1.2 million tons in 2015.