Articles in Category: Anti-Dumping

China will offer the Trump administration better market access for financial sector investments and U.S. beef exports to help avert a trade war, the Financial Times reported on Sunday, citing officials familiar with the matter.

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China is prepared to raise the investment ceiling in the Bilateral Investment treaty and is also willing to end the ban on U.S. beef imports, the newspaper also reported.

Commerce Secretary Wilbur Ross said on Friday that President Donald Trump and Chinese President Xi Jinping have agreed to a new 100-day plan for trade talks on Friday.

Steel Shipments Down in February, But Up Year-Over-Year

The American Iron and Steel Institute recently said that for the month of February 2017, U.S. steel mills shipped 7,232,341 net tons, a 6.2% decrease from the 7,708,416 nt shipped in the previous month, and a 2.4% increase from the 7,059,442 nt shipped in February 2016. Shipments year-to-date in 2017 are 14,940,757 nt, a 6% increase vs. 2016 shipments of 14,090,749 nt for two months.

A comparison of February shipments to the previous month of January shows the following changes:  hot rolled sheets, down 3%, hot-dipped galvanized sheets and strip, down 6% and cold-rolled sheets, down 8%.

The signals the U.S. is sending in the steel sector really worry Germany, so said Brigitte Zypries, German Economy Minister, according to Reuters in a recent article.

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This isn’t the first time the European Union has had a trade spat with the U.S. over steel but it is unusual for one party or the other to take the case to the World Trade Organization, claiming “accounting tricks” and “protectionism” designed to give domestic producers an “unfair competitive advantage.”

The E.U.’s position is this issue should have been addressed through bilateral negotiations giving them the opportunity to show Germany, French and Austrian steel producers are not dumping steel and are not being subsidized, but President Trump signed executive orders last Friday aimed at identifying abuses causing the huge U.S. trade deficit, and Germany is deemed one of the worst culprits.

Port Talbot steel plant

British Steel and its Port Talbot plant could be the next company in line for carbon and alloy steel plate tariffs from the U.S. Source: Adobe Stock/Petert2

However, by issuing a final finding that European and Asian producers dumped certain carbon and alloy steel cut-to-length plate in the U.S. market, the Department of Commerce says it is allowed to impose duties ranging from 3.62 to 148%, but the E.U. claims the decision has been determined on the basis of dodgy accounting estimates and the correct place to discuss them is at the negotiating table or via the WTO, not by applying duties which will then take months to address and impact trade for a year or more, essentially shutting European mills out of the U.S. market. Read more

A recent Financial Times article lays the blame for falling iron ore prices in China firmly at the door of Australia’s Department of Industry Innovation and Science, whose latest quarterly report predicted average prices in China would fall to $65 per metric ton this year before ultimately declining further to $51 per mt.

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The FT quoted the department’s report saying prices would be weighed down by the combined impact of ongoing growth in low-cost supply and soft demand.

Source: Financial Times

While we don’t doubt that investors will have taken notice of the department’s report, the fact is analysts have been calling for a fall in the iron ore price for months now. Indeed, the rising tide of supply has been expected to weigh on prices for much of the last six months, such that continued price resilience and robust demand have caught some by surprise. Read more

Dean A. Pinkert is a partner in Hughes Hubbard’s International Trade practice. He is a former Commissioner of the U.S. International Trade Commission. Pinkert was nominated by President Bush and confirmed by the Senate in 2007, and was designated Vice Chairman by President Obama in 2014.

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As a commissioner, Pinkert participated in numerous anti-dumping, countervailing duty, and safeguard investigations, including the special safeguard investigation of passenger tires that resulted in import relief for the domestic tire industry and was upheld by the World Trade Organization. He participated in an unprecedented number of final determinations in Section 337 investigations during his tenure, notably dissenting in an electronic devices case that went to President for policy review. President Obama, relying on many of the factors cited in the dissent, overruled the commission for the first time since 1987.

Dean Pinkert

Former ITC Vice Chair A. Dean Pinkert. Source: Hughes Hubbard.

Pinkert spoke with MetalMiner Editor Jeff Yoders by phone about several issues facing metals producers and manufacturers, including global steel and aluminum overcapacity and how the new Trump administration can approach trade and overcapacity issues. This is part two of our discussion, which focuses on cases that rise to the WTO. See part one here if you missed it.

Jeff Yoders: Is there a risk to elevating any such case to the WTO of essentially spending the money and hiring the lawyers, only to lose the case?

Dean Pinkert: First, there are two types of cases. When there’s a decision by the U.S. Trade Representative‘s office to file a case with the WTO, we’ll call those offensive cases. They are filing a complaint with the WTO saying that another country is violating its trade commitments. By the way, I think the Obama administration was very aggressive at developing and filing cases of that kind.

There is  another type, and these are what I was referring to earlier, where the U.S. has an investigation of something, concludes that a trade remedy is appropriate, imposes that trade remedy and then gets sued and it goes to the WTO. In 2002, when the steel safeguard relief was put into place, the U.S. was taken to the WTO by our trading partners and, ultimately, the WTO ruled against the safeguard. It was then withdrawn, although the Bush administration said the reason it was withdrawn was because it achieved its aim of giving the domestic industry some breathing space so that they could regain profitability, not because of the loss.

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I was talking more about that more defensive posture in the WTO when I was talking about safeguards.

JY: There’s a lot of talk about a border-adjustment tax right now. Many policy papers are calling the scheme very similar to a value-added tax but only on companies. Is there a chance that such an idea might run afoul of WTO rules?

DP: We don’t now exactly what it would look like or what the final measure, if there is one, would be. We don’t know how the WTO would react to it, either, but it’s possible that the WTO would consider it an export subsidy and, if it did, then that would have some serious consequences because there is a list of various kinds of subsidies, particularly export subsidies, in the WTO agreement. If it was found to be an export subsidy there would be considerable consequences for the U.S.

But, it’s important to note that we don’t even know what the border adjustment tax will look like yet. We would have to see. Read more

Last week, the Trump trade agenda finally took off as the Commerce Department, now officially led by billionaire Wilbur Ross, finalized new carbon and alloy steel plate anti-dumping duties and President Donald Trump had some choice words as he signed two new executive orders he says will level the international trade playing field for U.S. manufacturers.

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“There’s never been a systematic examination, country by country and major product by major product, of why do we have the deficit,” Ross said during an interview on “Sunday Morning Futures” on Fox News with Sandra Smith, who was sitting in for host Maria Bartiromo.

“There’s a lot that’s due to cheating, there’s a lot due to dumping, there’s a lot that’s due to subsidies that are illegal, lot to do with a lot of things that are not inherent in free trade,” he continued.

Ross cited entities, many of which were created purely to facilitate exports, that go out of business before duties are collected as one situation that leads to lax enforcement of existing anti-dumping and countervailing duties orders, what the other executive order instructed commerce to accomplish.

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The new executive orders come just as President Trump will meet this week with Chinese President Xi Jinging at Trump’s Mar-a-Lago resort in Florida. It’ll be Trump’s first face-to-face meeting with Xi, after a campaign that was highly critical of U.S. trade with China.

Carbon and Alloy Steel Plate Duties

Commerce had a busy week, announcing affirmative final determinations that steel producers in Austria, Belgium, France, Germany, Italy, Japan, the Republic of Korea (South Korea), and Taiwan are dumping imports of carbon and alloy steel plate in the U.S.

The U.S. is preparing a review of China’s bid for market-economy status in the World Trade Organization, the Wall Street Journal reported today. Finishing a busy day in trade, Trump also signed two executive orders designed to enhance enforcement of current trade pacts and promised to end “the theft of American prosperity.”

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The Trump administration appears ready to formalize China’s unfavorable status in trade cases, which means the country’s goods would be eligible for higher U.S. tariffs, the paper said, citing documents from the Commerce Department website. The review is expected to be announced as early as this week, it said.

The first of the two trade orders Trump signed today calls for completion of a large-scale report to identify “every form of trade abuse and every non-reciprocal practice that now contributes to the U.S. trade deficit,” Commerce Secretary Wilbur Ross told the Washington Post.

Read more

The Department of Commerce today announced its affirmative final determinations that steel producers in Austria, Belgium, France, Germany, Italy, Japan, the Republic of Korea (South Korea), and Taiwan are dumping imports of carbon and alloy steel plate in the U.S.

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Margins in the dumping investigations ranged from 3.62% to 148.02%, and were, in certain instances, based on adverse findings against non-cooperative responding parties. Commerce also determined that critical circumstances exist in three investigations, allowing for collection of duties for a retroactive period of 90 days before the preliminary determination, spanning back to August 16. Commerce also found that South Korea is providing unfair subsidies to its producers of steel plate at a countervailable duty rate of 4.31%. As a result of these final affirmative determinations, Commerce will instruct Customs and Border Protection to collect cash deposits based on these final rates. Read more

Dean A. Pinkert is a partner in Hughes Hubbard’s International Trade practice. He is a former Commissioner of the U.S. International Trade Commission. Pinkert was nominated by President Bush and confirmed by the Senate in 2007, and was designated Vice Chairman by President Obama in 2014.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

As a commissioner, Pinkert participated in numerous anti-dumping, countervailing duty, and safeguard investigations, including the special safeguard investigation of passenger tires that resulted in import relief for the domestic tire industry and was upheld by the World Trade Organization. He participated in an unprecedented number of final determinations in Section 337 investigations during his tenure, notably dissenting in an electronic devices case that went to President for policy review. President Obama, relying on many of the factors cited in the dissent, overruled the commission for the first time since 1987.

Dean Pinkert

Former ITC Vice Chair A. Dean Pinkert. Source: Hughes Hubbard.

Pinkert spoke with MetalMiner Editor Jeff Yoders by phone about several issues facing metals producers and manufacturers, including global steel and aluminum overcapacity and how the new Trump administration can approach trade and overcapacity issues. This is part one of our discussion.

Jeff Yoders: Do you feel that the current tools being used to regulate trade are effective in dealing with global steel overcapacity? And global overcapacity for other metals?

Dean Pinkert: If you go back a year now, to the G20 decision to look at the overcapacity situation regarding steel, there has been a lot discussion, and there will be more, but, eventually, they will be able to figure out a way to proceed with a plan to reduce worldwide overcapacity. I just saw today that some of the aluminum interests around the world are looking to initiate that same type of process with regard to aluminum production.

That tells you that there’s a sense that there is progress being made on the steel side and the aluminum producers feel that they’re in a similar worldwide overcapacity issue and they want to see if that G20 process, intended to get the amount of product produced worldwide, down could be successful. Read more

The seesaw battle between steelmakers in China and India took a new twist recently with a report in a Chinese newspaper calling the Indian government on its “protectionist” stance on steel.

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The state-run Global Times newspaper said in a report, referring to India’s decision to award its first bullet train project to Japan, that India needed to have a “sober” look vis-a-vis China when it came to solutions for India’s proposed railway network revamp or its entirely new high-speed rail project.

The high-speed “bullet train” project is likely to commence in 2018 on a 315-mile (508-kilometer) route between Mumbai and Ahmedabad. It’s slated to be completed by 2023.

India has been waging a war against cheap steel imports into the country for some time now, with Chinese steel companies high on their bad guy list. The government imposed taxes in various forms not to protect its own steel industry, but to equalize import prices to production costs. Over 80% of the funding for the project is coming from Japanese investments. Read more

In the ongoing dispute between Japan and India over cheap steel imports, Japan has requested that the World Trade Organization set up a panel to resolve the dispute.

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Early indications are that the move will be opposed by India. Japan’s request comes after New Delhi imposed safeguard duties on several iron and steel products, which India claimed violated global trade rules.

India’s finance ministry imposed definitive safeguard duties on imports of hot-rolled flat products of non-alloy steel in coils to counter a surge in imports from several countries, including Japan. India’s stand has been that such cheap imports “caused injury to domestic steel industries.”

New Delhi would have taken recourse to the safeguard measures on grounds that the import surge in hot-rolled flat products is the result of unforeseen developments. India levied 20% safeguard duties ad valorem minus anti-dumping duties on Japanese imports of hot-rolled flat products between September 2015 and September 2016; 18% between September 2016 and March 2017; 15% between March 2017 and to expire by September 2017; and 10% for a future period in September 2017 and March 2018.

As reported by MetalMiner, despite the excellent trade relations between the two nations, Japan is unhappy with India’s decisions to place a minimum import price and other assorted duties to protect its domestic steel industry. Japan claims this has halved its steel exports to India in the last year.

Japan requested the panel came after India’s failure to provide “convincing reasons” for its safeguard and anti-dumping actions. It’s said the request will come up before the dispute settlement body (DSB) meeting today.

According to a report in the Financial Express, India opposes Japan’s move. Quoting experts, the report said since WTO cases can be settled with rulings that were “prospective,” any adverse judgment would not affect India significantly.

In a parallel development, there are reports coming in that India would use make it compulsory for Indian customers to use domestically produced steel, to stop inroads made by steel products from other countries including China.

India may soon mandate the use of local steel in government infrastructure projects worth billions of dollars, pitching it as a WTO-compliant protectionist measure.

Quoting news agency Reuters, the report said the Indian Government expects to move to boost sales of local companies such as JSW Steel and Tata Steel and eventually attract global steelmakers such as ArcelorMittal and POSCO to invest in the country.

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India is the world’s third-largest steel consumer, but its current level of capacity utilization by domestic steel producers is below 80%.