Major U.S. Steel Producers Accuse China of Circumventing Trade Orders, Says Kelley Drye & Warren LLP

WASHINGTON, Sept. 22, 2016 /PRNewswire/ -- Four major U.S. steel producers – ArcelorMittal USA, Nucor Corporation, AK Steel Corporation and United States Steel Corporation – announced they are filing petitions charging that unfairly traded imports of corrosion-resistant carbon steel and cold-rolled carbon steel from China are circumventing the antidumping and countervailing duty orders recently imposed by the U.S. Department of Commerce.  The U.S. producers contend that immediately after Commerce imposed provisional duties on these imports, Chinese producers began to divert merchandise through Vietnam for completion prior to exporting the product to the United States in an attempt to evade the duties.   Imports from China of corrosion-resistant and cold-rolled steel declined dramatically in response to Commerce's imposition of duties, while imports from Vietnam surged as the domestic steel producers believe Chinese steel producers attempted to circumvent these orders by transshipping steel products through Vietnam for minor finishing operations.

Antidumping and countervailing orders were imposed in July 2016 against imports of corrosion-resistant steel from China.  Earlier this week, antidumping and countervailing orders were imposed against imports of cold-rolled steel from China.  These orders reflected findings by the Commerce Department that imports of corrosion-resistant steel and cold-rolled steel from China are being dumped into the U.S. market at margins of 199.43 percent and 265.79 percent, respectively, and are receiving unfair government subsidies from China ranging from 39.05 percent to 256.44 percent.   The U.S. International Trade Commission further found that these imports, along with imports from other countries, are causing material injury to the domestic industries producing these products.  The trade actions were filed in response to large and increasing volumes of low-priced imports of corrosion-resistant steel and cold-rolled steel that have caused serious harm to U.S. producers and their workers in recent years. 

Under a U.S. law provision addressing circumvention of trade orders, the Commerce Department may include within the scope of an antidumping or countervailing duty order imported subject merchandise that is completed or assembled in another foreign country.  The U.S. steel producers allege that the factors demonstrating circumvention under this statutory provision are met.  The domestic producers are requesting that the Department initiate circumvention inquiries into these practices and that it simultaneously issue an affirmative preliminary determination to suspend liquidation of imports of corrosion-resistant steel and cold-rolled steel imported from Vietnam. 

"These attempts by China to circumvent the antidumping and countervailing duty orders just imposed on carbon steel products must be addressed swiftly or this behavior will undermine the remedial effects of the law that the U.S. steel producers and their workers so desperately need," according to counsel for the domestic petitioners.  "This type of behavior is becoming more frequent, so it is important that the U.S. Government send a strong message that circumvention of our trade laws will not be tolerated."

FACT SHEET

Antidumping and countervailing duties:  Antidumping duties are intended to offset the amount by which a product is sold at less than fair value, or "dumped," in the United States.  The margin of dumping is calculated by the Commerce Department.  Estimated duties in the amount of the dumping are collected from importers at the time of importation.  Countervailing duties are intended to offset unfair subsidies that are provided by foreign governments and benefit the production of a particular good.  The USITC, an independent agency, will determine whether the domestic industry is materially injured or threatened with material injury by reason of the unfairly traded imports.

Next steps:   The Commerce Department will determine within 45 days whether to initiate the request for a circumvention ruling and whether to issue a simultaneous preliminary determination that leads to the suspension of liquidation of imports of these products.  The entire proceeding must be completed within 300 days.

Product description:  Corrosion-resistant steel is steel sheet that has been coated or plated with a corrosion-or heat-resistant metal to prevent corrosion and thereby extend the service life of the products made from the steel.  Steel coated with zinc, aluminum, or any of several zinc-aluminum alloys comprises most of the product at issue.  Based on these unique product characteristics, corrosion-resistant steel is widely used in construction applications such as roofing, siding, hardware, roof and bridge decks, guard rails, and culverts.   Corrosion-resistant steel is also used in the manufacture of automobiles, trucks, appliances, industrial equipment and agricultural equipment. 

Cold-rolled steel products are cold-reduced, flat-rolled steel products, whether or not in coils and regardless of thickness, that are not clad, plated, or coated with metal.  The subject products include cold-rolled steel that is annealed, painted, varnished, or coated with plastics or other non-metallic substances.  Cold-rolled steel is primarily used in the production of appliances, automotive products, containers, and construction products, and a significant portion of cold-rolled steel produced in the United States is used for further processing into metallic-coated steels.  

Petitioning companies:  The petitioning companies and their law firms are ArcelorMittal USA (represented by Kelley Drye & Warren LLP), Nucor Corporation (represented by Wiley Rein LLP), AK Steel Corporation (represented by King & Spalding LLP), and United States Steel Corporation (represented by Quinn Emanuel LLP).

SOURCE Kelley Drye & Warren LLP