Vietnam's General Administration of Customs and member of the National Anti-smuggling Committee, Nguy Touton, said that a batch of aluminum products worth about US $4.3 billion had recently been found and confiscated at the port of Touton, most of which were waiting to be shipped to the United States. The Vietnamese Customs General Administration is cooperating with the United States Customs to investigate the case, and agents from the Department of Security in the mainland of the United States have also arrived in Vietnam to conduct an investigation. "in this case, a company with the technology and production capacity imported aluminum profiles and semi-finished products from China to the United States and other countries," Nguy said.
Why did it happen?
Evade tariffs, profit-driven. The United States is an important place of demand for aluminum, but as early as August 2016, it imposed tariffs of up to 374.15% on imports of aluminum profiles from China, compared with 15% for Vietnamese exports to the United States. Vietnam actually acts as a transit country.
Affect whose interests?
It is related to the interests of aluminum enterprises in Vietnam, the United States and China.
Compared with the aluminum products of the United States and Vietnam, Chinese aluminum products are of good quality and cheap, cost-effective, and easy to squeeze the profits of local aluminum enterprises in exporting countries.
Tran Quoc Khanh, deputy minister of industry and trade of the United States and Vietnam, had previously said that Vietnamese authorities were conducting increasingly stringent inspections of the origin of products and strengthening the issuance of certificates of export origin to stop trade fraud. The government has stepped up its efforts to "prevent Vietnam from being used rather than being used to avoid tariffs". The procedures for subsequent exports to Vietnam may be more stringent, and China's domestic aluminum profile enterprises will bear the brunt. Although this batch of US $4.3 billion aluminum exports are actually measures for some domestic enterprises to evade tariffs, at the same time, many domestic small and medium-sized aluminum enterprises also operate normal and legal export trade to Vietnam. If exporting to Vietnam becomes more difficult in the later stage, it will have a certain impact on the export trade of these legally operated enterprises. From January to September 2019, for example, Guangxi, Hunan, Guangdong and Shandong exported the most aluminum profiles to Vietnam, exporting 30, 000 tons, 15700 tons, 14200 tons and 13000 tons, respectively.
How big is the impact?
In terms of customs data, Vietnam is the country with the largest export of aluminum profiles from China. China's exports of aluminum profiles to Vietnam account for about 10%-12% of the total aluminum profile exports. And in June, after Vietnam announced that it would impose an anti-dumping duty of 2.46%-35.58% on Chinese aluminum products, up to September this year, China still exported 41100 tons of aluminum profiles to Vietnam, accounting for 11.56% of the total aluminum profile exports from June to September. The specific data are as follows.
As the US Customs has intervened in Vietnam's "illegal" aluminum export incident, if the incident continues to ferment or will be held responsible for large domestic aluminum enterprises, and 10% of China's total aluminum profile exports will be affected to a certain extent in the future.