Certain steel products Vietnam is selling to the U.S. are being produced from Chinese materials, the U.S. Department of Commerce said in a statement late Tuesday.
American steelmakers complained last year that Chinese companies appeared to be avoiding huge tariffs by diverting products to Vietnam for “minor processing” before they were shipped to the U.S.
The Commerce Department took up the case in November. It hit Vietnam on Tuesday with duties of more than 500% on cold-rolled steel that’s based on Chinese materials and over 200% on corrosion-resistant steel with similar origins.
Steel has for years been a major point of trade friction between the U.S. and China, the world’s biggest producer of the metal.
American and European steelmakers have accused China of dumping its unwanted metal on other markets, pushing down prices, forcing rivals to close their plants and killing thousands of jobs.
U.S. Steel said the move “represents a critical step to shutting down one of the many paths used to flood the U.S. with dumped and subsidized steel.”
“This decision presents an encouraging sign for the steel industry and should put other countries and companies on notice that their cheating will no longer be tolerated,” the company said in a statement.
Beijing has defended itself, saying overcapacity is a global problem brought on by weaker demand.
The Chinese and Vietnamese governments didn’t immediately respond to requests for comment Wednesday.
Last month, a European Union agency said it had also found that Chinese steel was being rerouted through Vietnam to evade tariffs, according to Reuters.
President Trump has criticized China in the past over steel, accusing it of cheating on prices. But his administration hasn’t yet announced the results of a separate investigation into whether shipments of steel from other countries pose a risk to national security.
Commerce Secretary Wilbur Ross had said his team would announce its findings, which could result in big tariffs, by the end of June. But Trump told The Wall Street Journal in July that he wanted to tackle several other big goals, including passing tax cuts, before he returned to the investigation.
The U.S. Commerce Department said Tuesday that it would make its final ruling on the Vietnam steel case in February.