Controversy Around EU Imposed Anti-Dumping Duty On Turkey’s Steel
Steel NewsDate: 04-07-2023 by: Ngan Le
Trade remedies take place as an apparent trend in the integration process of the global economy. Therefore, it is not surprising that anti-dumping cases are escalating gradually and most recently, the EU imposed anti-dumping duties on Turkish steel products.
Overall the evolution of the EU imposed anti-dumping duty on Turkish steel
On August 12, 2022, the European Commission announced the decision to impose anti-dumping duties on galvanized steel products from Turkey. According to information from the commission, an investigation into trade remedies evidence has been started from January 2020 until December 2020 after the request from the European Steel Association (EUROFER). The products under investigation include hot-dip galvanized steel and galvalume steel in both coil and flat forms.
After many preliminary investigations, the European Union decided to impose anti-dumping duties ranging from 8% to 11% on galvanized steel products imported from Turkey. The tax rate will be applied depending on the different manufacturing plants for 5 years.
Analyze some causes of the lawsuit from the EU
Explaining the reason for the incident, the European said that the import price of galvanized steel from Turkey has decreased significantly and it has a significant difference when compared to the price of the steel manufacturers in the EU from 2018. By the end of 2020, the price of Turkish steel will have decreased by half compared to the price of steel from Europe. This evidence is enough for the European Union to conclude that Turkish steel products have been dumped at 2.4 - 39.8%.
For a long time, the EU market has always been an important export market for Turkey. By 2021, Turkey's total export of galvanized steel has reached 1.6 million tons, equivalent to a value of 2 billion USD. Along with that, Europe's steel consumption volume reached a stable level from 2017 to 2019 but then decreased by 10% in 2020, the cause partly due to pressure from steel imported from Turkey.
The EU's decision to apply an anti-dumping policy is seen as a negative effect on Turkish exporters, but it helps European factories reduce price pressure among a series of international exporters. As a result, EU producers can implement a strategy to stabilize prices as well as reduce rivalry from competitors.
Some reactions from Turkey importers face to anti-dumping duty
Before the results of the anti-dumping duties, the Turkish Steel Exporters Association had fierce controversies. Accordingly, the Turkey side declared that the price of galvanized steel was directly affected by the previous price fluctuation of HRC. However, the EU side rejected this claim.
In addition, the European Union also rejected some opinions that the cause of their steel output decline was mainly due to weak demand. Some experts believe that European manufacturers have invested in inappropriate strategies during and after the Covid pandemic has caused operating capacity to exceed consumption, leading to substantial losses which adversely affect profits.
“Our export situation will be aggravated by these decisions, there is a high rate of possibility that we will lose in the competitive position compared to India, Korea, and Vietnam,” said the Export Association. Turkish Steel (CIB) commented.
Vietnam's perspective on Turkey's anti-dumping duty
When faced with the anti-dumping tax case from Turkey, Vietnam expressed severe concern about the anti-dumping issue as a steel exporter. Vietnam and Turkey both have similarities in the export market while the EU market has always been one of the four largest markets for Vietnam's galvanized steel industry.
Currently, Vietnam is considered one of the countries with rapid growth in export turnover when many of Vietnam's export products, including galvanized steel, certainly create competitive pressure on domestic markets. This development causes many countries to pay attention including the European Union. Therefore, the galvanized steel industry is predicted to be no exception to this inevitable trend with a high probability of imposed trade remedies tax policies in the future.
Although Vietnam's galvanized steel has not yet been subject to trade remedy lawsuits when exporting to the European market, it will be limited in quantity instead. Specifically, on 1st July 2022, Vietnam's galvanized steel exports will be managed under a quota of 1.8 million tons. If the export volume in the year exceeds the quota, the import tax will have to pay an additional 25%.
In the worries about anticipating trade remedies from Europe in the future, the European market has always been a potential export land for Vietnamese steel manufacturers. Because it has only 3 of a total of 23 products subject to quotas including cold rolled steel, galvanized steel, and stainless steel. The remaining 20 types of steel products temporarily do not apply to quotas and are not subject to additional tax rates.