The U.S. Department of Commerce ("DOC") made a preliminary decision in its anti-dumping investigations on imports of corrosion-resistant steel last week and concluded that China, India, Italy and South Korea have been illegally dumping corrosion-resistant steel into the U.S. market and therefore, are subject to anti-dumping duties. The ruling marks yet another major step in stemming the flood of unfairly-traded foreign imports.
The DOC will now instruct U.S. Customs and Border Protection to start requiring U.S. importers of these steel products from these four countries to deposit estimated anti-dumping duties at the time of import.
The DOC has imposed a whopping duty rate of 255.80% on imports of these products from China. This will badly hit Chinese exporters including Yieh Phui (China) Technomaterial Co. Ltd.
With respect to Taiwan, the DOC’s preliminarily determinations were negative. The commerce department found that the margin of dumping from that country was 0%. Taiwan is one of the five countries accused of dumping these products in the original petitions.
Corrosion-resistant steel is coated with a corrosion or heat-resistant metal such as zinc and aluminum to prevent corrosion, thus extending the service life of the products made from the steel. It is used in making automobiles, trucks, appliances, and industrial and agricultural equipment.
The nation’s biggest steel producers, in Jun 2015, filed anti-dumping and countervailing duty petitions with the U.S. International Trade Commission (USITC) and the DOC against five countries accused for illegally dumping cheap corrosion-resistant steel.
The petitions, which were filed by six major U.S. steelmakers including Nucor NUE, U.S. Steel X, AK Steel AKS, Steel Dynamics STLD and ArcelorMittal USA – a part of ArcelorMittal MT – charge that a deluge of significantly subsidized imports of corrosion-resistant steel from China, India, Italy, South Korea and Taiwan are causing material injury to the U.S. steel industry. The petitions also charge that these producers benefit from a number of countervailable subsidies provided by their respective governments.
Imports of corrosion-resistant steel from these countries have rocketed 85% between 2012 and 2014. These producers exported over $2.2 billion of corrosion-resistant steel to U.S. market last year.
These products are being illegally dumped by foreign steel producers in the American market at unfairly low prices that significantly undercut the prices of U.S. steel makers. Low costs of production have enabled the overseas producers (especially China) to sell their products at cheaper rates, leading to an industry-wide price decline, hurting margins of U.S. steel makers.
The DOC, in Nov 2015, imposed countervailing duties on imports of corrosion-resistant steel from China, India, Italy and South Korea after concluding that these countries are benefiting from unfair government subsidies.
The commerce department will now verify the factual information submitted by the foreign producers. This will be followed by an opportunity for parties to submit case and rebuttal briefs to the DOC and to participate in a hearing. The commerce department will issue its final rulings following these events (expected in second-quarter 2016).
The U.S. steel industry remains under the threat of unfairly-traded, cheaper imports in the wake of a stronger dollar. Domestic producers are struggling to cope with falling steel prices as a result of the combined impact of imports and overcapacity in the industry. Price declines are expected to continue if tariffs are not imposed on imports.
The DOC recently levied countervailing duties on imports of cold-rolled steel from Brazil, China, India and Russia. This includes a massive subsidy duty rate of 227.29% on imports of these products from China. The commerce department is expected to make preliminary anti-dumping determinations on this trade case (filed in Jul 2015) on or about Feb 23, 2016.
U.S. steel makers, in Aug 2015, also filled anti-dumping and countervailing duty petitions against seven countries accused for illegally dumping certain hot-rolled steel flat products into the American market. The USITC made a preliminary determination on this case in Sep 2015 stating that hot-rolled steel produced in these countries is causing injury to the U.S. steel industry. Investigative outcome with respect to dumping of these products are expected in Jan 2016.
Favorable final rulings in these trade cases will ensure a fairer and more competitive market for American steel makers and workers.
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