Tariff hike on tinplates to push up prices of canned goods

The Department of Trade and Industry (DTI) said yesterday it is aware of the possible increase in the prices of canned goods should the proposed seven percent tariff on tinplates be implemented.

However, DTI Undersecretary Adrian S. Cristobal said "the DTI has made no final position yet" and that it is still studying the impact of the tariff increase on various products.

He clarified that "although we would want to make the operation of the National Steel Corp. (NSC) become more viable, we are also mindful of Filipino consumers who buy canned goods."

Cristobal acknowledged that the tariff increase would cause a corresponding increase in consumer products using tin cans.

However, he reiterated that "the DTI continuously works to ensure that prices of basic goods are affordable and within reach by our consumers."

Industry sources earlier said that the DTI appears amenable to a proposal to impose a five percent tariff on hot-roiled coils and seven percent on cold-roiled coils and tinplates, while maintaining zero tariff on steel billets.

The agency is also leaning towards the 5-7-7 proposal even as Global Steelworks International Inc. (GSII), the renamed NSC, is pushing for a higher tariff structure of 6-8-8 for the same products.

However, DTI Secretary Cesar V. Purisima is reportedly insisting that a dialogue with downstream steel industry players be held to hear their views on the proposed tariff and be able to assess the impact of such tariff imposition.

The current tariff rates for materials used in making cans for food processing are zero percent for flat roiled products of iron or non-alloy steel of width 600 mm or more as well as plated or coated tin with a thickness of less than 0.5 mm; and one percent for plated or coated with chromium oxides (tin free steel).

NSC/GSII is petitioning for tariff protection for its products comprised of steel billets, cold and hot-roiled coil and tin plates.

Purisina has not taken any position on the tariff request and is specifically asking for the meeting to determine NSC’s needs and the concerns of downstream steel industry players.

NSC/GSII wants tariff protection to enable it to recover while it starts its manufacturing operations.

On the other hand, downstream steel industry players argue that they would be adversely affected by a rise in tariff rates especially since NSC does not have the capacity to provide the needs of the local downstream industry players.