Duties on Vietnamese steel in Malaysia have been abolished.

In a move aimed at strengthening internal trading within the ASEAN region, the Malaysian Ministry of Investment, Trade and Industry (MITI) has decided to remove the anti-dumping tariff on cold-rolled steel pipes and non-alloy steel products originating from Vietnam and South Korea. This decision, made by the Trade Defence Department of Malaysia, is a positive result for Vietnamese steel companies.

Malaysia, as the only Southeast Asian country to receive a higher tariff after negotiations with the US, has been carefully navigating its trade relations. The Minister responsible for this decision, Tengku Datuk Seri Zafrul Abdul Aziz, has emphasised that the country will not compromise on its "red lines" of national interest during trade negotiations.

The tariffs on steel imports from Vietnam ranged from 7% to 20% over the last five years. However, with the lifting of duties, the continued export of steel products from Vietnam to Malaysia is now possible. It's worth noting that tariffs on steel imports from China and Japan remain in place, but exclude products used in automotives.

The decision to lift duties on Vietnamese steel products could signal a focus on strengthening internal ASEAN trading rather than boosting exports to North America. This move to lift anti-dumping tariffs does not immediately offer a benefit for transshipments to evade higher duties.

Moreover, the increased steel supply could improve the resilience of the automotive supply chain network between Malaysia and Vietnam. The lifting of duties on Vietnamese steel products and the lifting of anti-dumping investigations on imported steel from South Korea further strengthen supply chain links within the ASEAN region.

Despite not reaching a deal regarding tariffs with the US, Malaysia is taking steps to bolster its trade relations within the ASEAN network. The ASEAN network may be aiming to strengthen its internal trading as a result of the lifted anti-dumping tariffs, benefiting both Malaysia and Vietnam as ASEAN member countries.

However, it's important to note that the decision does not affect tariffs on steel imports from China and Japan in the automotive sector. This indicates a careful balance in Malaysia's trade negotiations, maintaining its strategic interests while fostering stronger relationships within the ASEAN region.