Explainer: Countervailing and Antidumping Duties in Vietnam

Posted by Written by Mark Barnes Reading Time: 7 minutes

As the patchwork of multilateral free trade agreements governing international trade grows, so too does the use of non-tariff barriers like antidumping and countervailing duties. Here’s what foreign firms in Vietnam need to know and why doing a periodic supply chain audit is becoming increasingly business-critical.

Vietnam has signed up to a total of 15 free trade agreements with two more expected to be signed in the next year or so. These trade agreements have significantly lowered tariffs for businesses importing goods and services into Vietnam and companies in Vietnam exporting to other parts of the world.

But despite the prosperity free trade brings, there can often be negative consequences with foreign companies taking advantage of improved trade conditions to dump surplus goods on foreign markets.

Furthermore, governments often look to protect domestic industries impacted by reduced tariffs by providing subsidies. This can give those industries an unfair advantage in their export markets.

It is this reality that has given rise to antidumping duties (ADDs) and countervailing duties (CVDs). These two non-tariff barriers have become an important part of international trade and continue to grow in prominence.

Understanding how these mechanisms work in the Vietnamese context can be crucial when diversifying supply chains to include the rapidly growing Southeast Asian nation. It can also be helpful when establishing regional cross-border supply chains.

Vietnam’s application of ADD/CVDs

In Vietnam, ADDs and CVDs are handled by the Trade Remedies Authority of Vietnam, which reports to the Ministry of Industry and Trade.

There are currently 25 ADDs being applied to goods exported to Vietnam as well as one CVD. These are all targeted at exports from countries in Asia except for two ADDs that apply to some yarn products and certain sorbitol based products from India.

Notably, these measures are not only applied to alleged dumping nations but also third countries allegedly being used to circumvent Vietnam’s trade remedies.

Thailand, for example, is currently subjected to ADDs and CVDs on sugar products (See Decision No.1578/QD-BCT).

This was extended in August of last year (See Decision No. 1514/QD-BCT), by the Ministry of Industry and Trade (MoIT), to include sugar imported from Cambodia, Indonesia, Laos, Malaysia, and Myanmar. These five countries, MoIT found, were being used as third parties by Thai producers to circumvent trade remedies applied to Thai sugar.

This practice, of applying ADDs and CVDs to third countries is not unique to Vietnam either. On the contrary, Vietnam itself has been subjected to ADDs and CVDs as a third-party country used to circumvent trade remedies in other jurisdictions on multiple occasions.

Global trade dynamics: Vietnam’s role in circumventing trade restrictions targeting China

The ongoing so-called ‘trade war’ between China and the United States is fuelling a shift into Vietnam but that doesn’t always necessarily mean building manufacturing plants and factories.

Chinese manufacturers are increasingly looking at Vietnam as an access point to foreign markets and a way to circumvent trade restrictions on imports from China.

Solar panels made in China, for example, are subjected to antidumping duties in the US after it was determined that they were being sold below cost. These tariffs were applied in 2012 and subsequently saw Chinese manufacturers shift production to Taiwan. US tariffs were then extended to include Taiwan too.

This has now escalated further to include several companies in a number of Southeast Asian nations – last year, a US Department of Commerce investigation found that solar panels made by four companies exporting to the US from Malaysia, Thailand, Cambodia, and Vietnam were mostly made in China.

These four Southeast Asia nations, it found, were being used to circumvent ADDs and CVDs on the aforementioned solar panels. But this was just a preliminary hearing and there is still time for those companies to appeal. If the outcome is upheld, however, it could see ADDs/CVDs applied to imports from these countries to the tune of US$5 billion.

Increased use of ADDs and CVDs worldwide

The use of ADDs and CVDs has grown substantially in recent years as free trade agreements have proliferated.

From 2001 to 2010, a total of 483 antidumping measures went into force. The following decade, from 2011 to 2020, that number ballooned to 1323. The bulk of those measures were initiated by the United States and China was the most popular target, according to World Trade Organisation data.

Also of note is a huge spike in 2021. Whereas in 2020 just 106 new measures were enacted, the following year that number was 285.

There has also been a big uptick in countervailing measures. From 2001 to 2010, just 41 countervailing duties were in force. From 2011 to 2020, however, that number climbed to 151. There was also a huge spike in CVDs in 2021 with 38 measures put into place compared to just 21 a year earlier.

There is a point of note here..

Though on an upward trajectory overall, the number of new ADDs and CVDs dropped in 2020 versus 2019. This could be because of the pandemic slowing production and export volumes. By the same token, the spike in 2021 could be because of economies bouncing back. It could also be that the economic situation was volatile, and companies may have felt the need to take drastic measures, such as dumping excess stock, in order to stay afloat.

That said, it’s difficult to draw any definitive conclusions. Suffice to say, there are more ADD and CVD measures in place now than ever before.

Importance of supply chain audits

All of this is to say that though free trade agreements are opening up markets and creating avenues for diversified supply chains, through ADDs and CVDs – nation states are empowered to protect domestic enterprises.

With this in mind, it is important to note that Southeast Asia’s supply chains are becoming increasingly intertwined with the origin points of parts and materials sometimes opaque. Foreign firms need to do their due diligence on the companies they engage with across their supply chains to avoid costly ADD/CVD measures.

Companies considering diversifying their supply chains, particularly out of China, need to be mindful of this new paradigm.

Ensuring that compliance controls are in place in the case of local partners, clear knowledge of the corporate affiliations of partners, and an understanding of where raw materials and key inputs are sourced, are necessary to avoid being on the wrong side of an antidumping investigation.

Foreign firms should also be mindful that the ADD/CVD mechanism may be an option in case their Vietnam operations are impacted by unfair trade practices.

That said, ADDs and CVDs are just one among many potential complications that need to be considered when establishing cross-border supply chains. In this light, for expert advice on navigating potential trade barriers and legal pitfalls, contact the experts at Dezan Shira and Associates.

Appendix: Tables

About this data

  • This data only includes measures reported to the World Trade Organisation.
  • Data herein applies to antidumping and countervailing measures in force as of January 1, 2020.
  • Data current as of March 1, 2023.

Vietnam’s countervailing measures

Initiation date Against In force Subject product
21/09/2020 Thailand YES Cane sugar

Countervailing measures against Vietnam

Initiation date Initiated by In force Subject product
25/09/2020 India YES Copper tubes and pipes
21/12/2020 Canada YES Upholstered domestic seating
29/06/2020 United States YES Passenger vehicle and light truck tires
06/08/2019 United States YES Utility scale wind towers
10/09/2018 India YES Continuous cast copper wire rods
09/08/2018 India YES Stainless steel welded pipes
03/04/2018 United States YES Laminated woven sacks
25/05/2018 Canada YES Certain cold-rolled steel
27/10/2017 Canada YES Certain copper pipe fittings
25/06/2014 United States YES Certain steel nails
25/01/2012 United States YES Steel wire garment hangers
27/04/2009 United States YES Polyethylene retail carrier bags

Source: Countervailing measures – Trade Remedies Data Portal

Vietnam’s anti-dumping measures

Initiation date Against In force Subject product
11/12/2020 China YES Certain sorbitol
11/12/2020 Indonesia YES Certain sorbitol
11/12/2020 India YES Certain sorbitol
06/04/2020 China YES Polyester filament yarn
06/04/2020 Indonesia YES Polyester filament yarn
06/04/2020 India YES Polyester filament yarn
06/04/2020 Malaysia YES Polyester filament yarn
24/08/2020 Malaysia YES H-beam
21/09/2020 Thailand YES Cane sugar
03/09/2019 China YES Cold-rolled steel
31/10/2019 China YES Monosodium glutamate
31/10/2019 Indonesia YES Monosodium glutamate
05/08/2019 China YES Plastic products of polymers of propylene
05/08/2019 Malaysia YES Plastic products of polymers of propylene
05/08/2019 Thailand YES Plastic products of polymers of propylene
15/10/2018 China YES Flat rolled Iron or non-alloy steel, painted, plated or coated
15/10/2018 Korea, Republic of YES Flat rolled Iron or non-alloy steel, painted, plated or coated
10/01/2019 China YES Aluminium bars, rods and profiles
05/10/2016 China YES H-beam
03/03/2016 China NO Galvanized coating steel
03/03/2016 Korea, Republic of NO Galvanized coating steel
07/02/2013 China YES Cold rolled stainless steel
07/02/2013 Indonesia YES Cold rolled stainless steel
07/02/2013 Malaysia YES Cold rolled stainless steel
07/02/2013 Chinese Taipei YES Cold rolled stainless steel

Anti-dumping measures against Vietnamese imports

Initiation date Initiated by In force Subject product
18/05/2021 United States YES Raw honey
25/02/2021 Pakistan YES Cold rolled coils/sheets
30/06/2020 Australia YES Aluminium zinc coated steel (≥600mm)
23/11/2020 United States YES Polyester textured yarn
18/11/2020 Thailand YES Flat hot rolled steel in coils and not in coils
21/12/2020 Canada YES Upholstered domestic seating
28/10/2020 Chinese Taipei YES Ceramic tiles
04/08/2020 United States YES Seamless refined copper pipe and tube
22/06/2020 United States YES Certain walk-behind lawn mowers and parts thereof
24/06/2020 Türkiye YES Welded stainless steel tubes, pipes & profiles
22/09/2020 Canada YES Concrete reinforcing bar 3
24/04/2020 United States YES Mattresses
28/07/2020 Malaysia YES Cold rolled stainless steel in coils, sheets or any other form
17/03/2020 Malaysia YES Flat rolled product of non-alloy steel plated or coated with aluminium and zinc
08/11/2019 Canada YES Certain corrosion-resistant steel sheet 2
03/12/2019 Korea, Republic of YES Plywood
05/08/2019 United States YES Utility scale wind towers
16/05/2019 India YES Digital offset printing plates
02/04/2019 India NO Aluminium and zinc coated flat products
22/08/2018 Thailand YES Certain iron or steel pipe & tube
29/03/2019 Malaysia YES Cold rolled coils of iron or non-alloy steel, of width more than 1300mm
03/04/2018 United States YES Laminated woven sacks
25/07/2018 Malaysia YES Galvanised iron coils/sheets or galvanised steel coils/sheets
20/07/2018 Canada YES Carbon steel welded pipe 3
25/05/2018 Canada YES Certain cold-rolled steel
06/03/2018 Türkiye YES Cored wire of base metal
22/08/2017 India YES Nylon filament yarn
24/04/2017 Brazil YES Seamed tubes of austenitic stainless steel
09/05/2017 United States YES Tool chests and cabinets
27/10/2017 Canada YES Certain copper pipe fittings
19/08/2016 Argentina YES Flags and paving or tiles
07/12/2016 Korea, Republic of YES Ferro silico manganese
07/10/2016 Australia YES Zinc coated (galvanised) steel
16/08/2016 Australia NO Aluminium extrusions
27/01/2016 India NO Elastomeric filament yarn
17/09/2015 Thailand YES Certain hot dip plated or coated with aluminium zinc alloys of cold rolled steel
17/09/2015 Thailand YES Painted hot dip galvanized of cold rolled steel and painted hot dip plated or coated with aluminium zinc alloys of cold rolled steel
07/09/2015 Indonesia YES Biaxially oriented polypropylene
15/05/2015 Türkiye YES Polyester textured yarn
17/09/2015 Thailand YES Stainless steel pipe and tube
07/05/2015 India NO Plain medium density fibre board having thickness of 6mm
27/08/2015 Malaysia YES Cold rolled coils of alloy and non-alloy steel
27/07/2015 India NO Measuring tapes
14/10/2014 India NO Plastic processing machines
28/04/2015 Malaysia YES Prepainted, painted or colour coated steel coils
28/10/2014 India NO Melamine tableware and kitchenware
25/06/2014 United States YES Steel nails
21/07/2014 Canada YES Certain oil country tubular goods
29/07/2013 United States YES Oil country tubular goods
12/06/2013 United States YES Welded stainless pressure pipe
18/10/2012 Türkiye YES Yarn of man-made or synthetic or artificial staple fibres
03/09/2012 Brazil YES New bicycle/bike rubber tires
17/08/2012 Thailand YES Cold reduced carbon steel in coils and not in coils
25/06/2012 Brazil YES Motorcycle rubber tires
24/06/2011 Indonesia YES Cold rolled coil/sheet
24/01/2012 United States YES Utility scale wind towers
25/01/2012 United States YES steel wire garment hangers
05/05/2009 India NO Recordable digital versatile disc [DVD]
27/04/2009 United States YES Polyethylene retail carrier bags
28/01/2008 United States YES Uncovered innerspring units
11/01/2008 Türkiye YES Tarpaulin made of polyethylene/polypropylene
13/05/2006 Türkiye YES Endless transmission belts of trapezoidal cross-section (V-belts)
27/01/2004 United States YES Certain frozen warmwater shrimp
11/03/2004 Türkiye YES Motorcycle tires and tubes
11/03/2004 Türkiye YES Bicycle tires and tubes
24/07/2002 United States YES Certain frozen fish fillets

Source: Antidumping measures – Trade Remedies Data Portal

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