Vietnam plans to impose tariffs to protect local manufacturers from an influx of cheap steel from China, Europe and Southeast Asia, government media reported on Monday.
Steel products imported from China and Europe would be subject to a 20 percent tax, while those from countries within the Association of Southeast Asian Nations (ASEAN) would be taxed at 10 percent, Nguyen Kinh Quoc, a spokesman for Prime Minister Phan Van Khai, told the Vietnam News daily.
The move to introduce import tariffs follows an appeal by domestic steel manufacturers after local prices slumped by around a fifth.
Traders said this month cheap construction steel from China had stunted Vietnam's domestic market and led to the temporary closure of five steel plants.
Quoc did not say when the new taxes would take effect. Imports of steel products and ingot are currently exempt from tax.
Quoc told local media in a briefing on Friday the domestic price of steel wire rod had fallen up to 22.5 percent to between 6.2 million and 6.5 million dong ($395 and $414) per tonne from around eight million dong in April.
A trade ministry report this month said 140,000 tonnes of steel were sold in Vietnam in May, down 12.5 percent from April and 35 percent below May 2003.
Five steel plants, including joint ventures with Italian, South Korean and Australian interests, had stopped production due to slow sales, traders said.
Vietnam consumes about 2.8 million tonnes of construction steel per year, of which wire rod coils account for up to 35 percent.
The country relies largely on imports of steel ingot as a raw material. It imported around 1.8 million tonnes of ingot last year, mainly from China and Ukraine.
Apart from Vietnam, ASEAN countries comprise nine other Southeast Asian nations: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and the Philippines.