No to Taxing Imports of Steel Rods

In Costa Rica, the builders union has opposed the suggestion by Arcelor Mittal to establish a safeguard measure and charge a 15% import duty on rods.

Wednesday, May 2, 2018

Following the request by the company ArcelorMittal de Costa Rica S.A. in November 2017 to the Ministry of Economy, Industry and Commerce (MEIC), to impose a 15% tax on imports of used iron rods for construction, the Costa Rican Chamber of Construction (CCC) reported that since March 19, the MEIC started a process to evaluate whether or not to apply the measure.

In regards to this situation, MEIC minister, Geannina Dinarte, explained to Nacion.com that "... The process to raise the tariff ... is under investigation. A conclusion will be reached when a report with recommendations is made in order to determine whether or not the reestablishment of the tax will go ahead."

See Market Report "Imports of Iron and Steel Sheets Down 24%"

Dinarte added that " ... this is the slowest process and could be extended for up to a year. In this second process several actors are included: importers, exporters, producers and countries that could be involved. "

See also: "Construction: Upcoming works in Central America"

For its part, the CCC reported that "... The Costa Rican Chamber of Construction is opposed to the adoption of protectionist measures, without foundation, which would also result in the elimination of competition in the rod market, in favor of a single local producer. The Chamber will remain very vigilant in this process and will defend, as its Statute demands, the construction industry and its related activities and will fight to stimulate and strengthen the sector it represents." 

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More on this topic

Protectionism vs. Free Market

December 2018

In Costa Rica, the government's decision to reject ArcelorMittal's request to raise the import tax on steel rods generated such a conflict that the company assured that "it has no incentive to keep its production in the country."

After concluding its investigation, the Ministry of Economy, Industry and Commerce (MEIC) decided to reject the request of the manufacturer ArcelorMittal to apply a safeguard measure on imports of alloy and non-alloy steel rods.

Controversy Over Steel Rod Import Tariff Continues

November 2018

In Costa Rica, importing companies are against the ArcelorMittal proposal, which consists of raising the steel rod income tax from 1% to 15%.

On November 5th, a public audience was held in which importing companies and ArcelorMittal presented their arguments before the Ministry of Economy, Industry and Commerce (MEIC) regarding the proposal to raise the import tariff on steel rod by 14%.

Controversy Over Steel Rod Import Tariff

May 2018

ArcelorMittal has requested the restoration of a 15% import duty on steel rods, arguing that "the vast majority of these imports enter the country without paying taxes, taking advantage of a legal loophole".

After the reaction from the construction sector, the steel rod manufacturer in Costa Rica, ArcelorMittal, justified its decision to request an investigation from the Ministry of Economy, Industry and Commerce (MEIC) to decide if it will impose a safeguard measure and impose a 15% tariff on imports of the product.

Imposition of Safeguards on Steel Imports Being Considered

April 2018

The Ministry of Economy in Costa Rica, has started an investigation to determine if there are elements that allow application of a safeguard on imports of cylindrical rods made of alloy and non-alloy steel.

The trade union of industrialists in the Dominican Republic warned of the start of the investigation that the Ministry of Economy, Industry and Commerce (MEIC) initiated at the request of Arcelor Mittal Costa Rica, as indicated in the resolution published in the edition of March 19 in the official newspaper, La Gaceta.

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