American Steelmakers Say China is Dodging Tariffs by Sending Steel Through Vietnam

Alliance for American Manufacturing ^ | Friday, September 23, 2016 | Elizabeth Brotherton-Bunch

[Zhang Fei]

U.S. steelmakers say Chinese steel companies are purposely avoiding U.S. import tariffs by routing their shipments through Vietnam – and they want the Commerce Department to take action to stop it.

U.S. Steel, ArcelorMittal, Nucor Corp., and AK Steel plan to file petitions today and Monday with Commerce, which will have 45 days to decide whether to take up the cases. If Commerce eventually finds that China is evading U.S. tariffs, it could expand tariffs on steel that originates in China but is shipped through Vietnam.

And as the Wall Street Journal reported on Friday, the American steel companies appear to have a pretty strong case:

"Independent trade data appear to lend credence to the steelmaker claims. In the first six months of 2016, shipments of steel from Vietnam to the U.S. increased to 312,329 tons, from 25,756 tons. Over the same period, Chinese exports of steel to Vietnam rose 46% to 6.3 million tons from 4.3 million tons, according to data firm Global Trade Information Services."

[Will88]

Looks like this is an ongoing story. From 12/5/2017.

U.S. slaps duties on Vietnamese steel originating from China

[blam]

"growing talapia and such in dung,.....What is wrong with that? Talapia are natural shiteaters. Are now, always have been and I would NOT eat a bite."

You are exactly right. Normal fish is good for you because it has Omaga-3, which is good for you. Talapia has Omega-6 . which is terrible for you.

How Tilapia is a More Unhealthy Food Than Bacon

Research has found the inflammatory potential of farmed tilapia to be greater than a burger, doughnuts—even pork bacon! It gets worse.

[DannyTN]

This is why tariffs need to apply to all countries. The temptation to smuggle goods through nations that are exempt is Hugh. And Series.

[Zhang Fei]

https://en.wikipedia.org/wiki/Formosa_Ha_Tinh_Steel

I expect a $15b Taiwanese investment in Vietnam was a big reason for the ramp in output.

[Will88]

Yep, you just can’t look at what’s produced in any country and assume the ownership is also in that country. I should have thought of that, but I was thinking whether or not Vietnam had progressed enough since the war to have a domestic grown steel industry.

[Zhang Fei]

https://www.health.harvard.edu/newsletter_article/Flap_over_tilapia_sends_the_wrong_message
Omega-3s and omega-6s are both essential fats, meaning they are required for health and development and that the human body can’t make them from scratch but must get them, or their precursors, from food.

The key concern over omega-6 fats revolves around linoleic acid, the main omega-6. It is converted into arachidonic acid, a substance the body uses to make many important molecules, including some that stimulate inflammation and some that fight it, some that promote the blood’s tendency to form clots and others that discourage it.

In theory, eating too much omega-6 fat and too little omega-3 fat could promote inflammation, and thus heart disease. The Wake Forest researchers took this tack. To put their findings in perspective, they wrote, “All other nutritional content aside, the inflammatory potential of hamburger and pork bacon is lower than the average serving of farmed tilapia” because tilapia has more omega-6 fats and fewer omega-3s than red meat.

But the notion that omega-6 fats are bad just hasn’t panned out. For one thing, how the body uses arachidonic acid doesn’t depend on the ratio of omega-3 and omega-6 fats. For another, the argument overlooks the other good things that omega-6 fats do. These include lowering LDL and triglycerides, boosting protective HDL, and helping control blood sugar by making muscle cells respond more readily to insulin.

[blam]

Okay, thanks.

When my local Chinese restaurant swapped baked Talapia for the baked Salmon that I always enjoyed, I quit going there.

[madison10]

Shoot, just bought some ditch fish yesterday. (That is what our friends who know fish call Tilapia.)

[Enchante]

I knew I didn’t like tilapia, but that was when I thought it was the blandest of fish. Now that I know it is such a poop eater, well I really don’t like bland Poop!!! Oh, wait, that’s not what I mean to say....

[Zhang Fei]

I prefer tilapia to tuna and salmon because there’s generally not a heavy metal problem, since tilapia are vegetarian. I have a feeling that it’s become like chicken, pork or beef - a staple food.

[VeniVidiVici]

Everybody please stop picking on China!!

[VeniVidiVici]

I heard even a year ago, that this is what is happening with some fish foods we eat. China and Vietnam are growing talapia and such in dung, and shipping thru Thailand or other area countries to avoid being caught.

Thanks, I suspected as much. I don't even buy seafood anymore unless it's marked as US.

[dynoman]

Canadian steel production isn't even enough to be on the chart;

[Zhang Fei]

Canadian steel production isn’t even enough to be on the chart;

---

It doesn’t need to be. In 2017, the Chinese made about 900m tons of steel. Assuming evenly spaced production, 3Q YTD 2017 Chinese production would have been 675m tons. In 3Q YTD 2017 , we only imported about 4m* tons from the Canadians, and about 30m tons in total. In the same time period, the Canadians imported 600K tons of steel from China. So it’s possible that some of that steel was rerouted to the US. But most Canadian steel wasn’t directly imported from China.

And if you look at the list of sources of Canadian imports, only Vietnam** looks like it might have rerouted Chinese steel. But at 2% (or less) of Canadian imports, that’s only 150K tons. Add it to the Chinese number, and that’s only 750K tons out of the 4m tons Canada exported to the US. And that’s out of 30m tons of US steel imports.

Bottom line is that rerouted Chinese exports are unlikely to be the source of the problem. The real problem is Chinese dumping in a global market where steel basically has a single price adjusted for quality and transportation costs. It’s the same reason that a domestic oil glut hurts the Russians, even though they sell to completely different customers. No rerouting required there either.

There’s nothing wrong with protecting our steel industries, but it’s not primarily Chinese steel producers we’re hurting. Even with the tariff, the domestic price will be determined by the global price, with a 25% surcharge tacked on.

https://www.trade.gov/steel/countries/pdfs/imports-Canada.pdf

* My post about Canadian imports from China had a typo. It was 600,000 tons, not 600m tons.

** Even Vietnam now looks like a dubious source for rerouted imports because a $15b Taiwanese steel plant a decade in the making just came online.
https://en.wikipedia.org/wiki/Formosa_Ha_Tinh_Steel

[Zhang Fei]

My view is increasingly that if we want to punish China for protectionism, we should punish China. Put a 10% tariff on Chinese goods. On $500b of exports to the US, that’s $50b in tariff revenues (probably less, since imports will fall somewhat). They could go through a bunch of rerouting gymnastics, or they could just crack open their markets a bit more.

The point is that this steel-related tariff is just head-scratching if the target is China, and mostly hurts our allies. Canada is a natural steel producer. It produces the same amount of iron ore as the US, but only has 10% the population. Mexico’s not far behind in iron ore production. And we’re the Saudi Arabia of coking coal, and no slouch in iron ore production either.