Today, the Commerce Department announced its affirmative preliminary determinations in the countervailing duty investigations of imports of cold-rolled steel flat products from Brazil, China, India, and Russia, and its negative preliminary determination in the CVD investigation of imports of cold-rolled steel flat products from South Korea.
The investigations cover cold-rolled, flat-rolled steel products. It should come as no surprise that the largest subsidies are being assigned to Chinese importers.
Chinese Imports Take a Hit
In the China investigation, Commerce preliminarily determined that mandatory respondents Angang Group Hong Kong Co., Ltd. and Benxi Iron and Steel (Group) Special Steel Co., Ltd. and, a non-cooperative exporter — Commerce’s term for companies that do not respond to requests for information in the investigation — Qian’an Golden Point Trading Co., Ltd., received whopping subsidy rates of 227.29%.
All other exporters of cold-rolled steel flat products from China will be subject to that same subsidy rate of 227.29%. The rates are based on adverse facts available. Commerce determined that the Government of the People’s Republic of China, and the mandatory respondents, did not fully cooperate in the investigation.
Many Chinese companies do not answer requests from Commerce preferring, instead, to argue their cases later in the appeal process with either the US International Trade Commission or even the World Trade Organization.
For many of these Chinese exporters, this is not their first rodeo with Commerce or CVD investigations and we would expect further action at higher international trade courts. It is a boon, however, for US producers as those 227.29% duties will be required to be collected by US Customs and Immigration at all ports of entry while the case is further argued.
Countervailable subsidies are financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods.
- In the Brazil investigation, Commerce preliminarily determined that mandatory respondents Companhia Siderurgica Nacional and Usinas Siderurgicas de Minas Gerais both received a subsidy rate of 7.42%. All other producers/exporters in Brazil have been assigned a preliminary subsidy rate of 7.42%.
- In the India investigation, Commerce preliminarily determined that sole mandatory respondent JSW Steel Limited and its cross-owned affiliate JSW Coated Products Limited received a subsidy rate of 4.45% All other producers/exporters in India have been assigned a preliminary subsidy rate of 4.45%.
- In the Russia investigation, Commerce preliminarily determined that mandatory respondents Novolipetsk Steel OJSC (NLMK), Novex Trading, Altai-Koks OJSC, Dolomite OJSC, Stoilensky OJSC, Studenovskaya (Stagdok) OJSC, Trading House LLC, Vtorchermet NLMK LLC, Vtorchermet OJSC, and Vtorchermet NLMK Center LLC (collectively, the NLMK Companies) received a subsidy rate of 6.33% and PAO Severstal, Severstal Export GmbH, JSC Karelsky Okatysh, AO OLKON, AO Vorkutaugol, and JSC Vtorchermet (collectively, the Severstal Companies) received a subsidy rate of 0.01%, which is de minimis. The “all others” rate is the rate calculated for the NLMK Companies (6.33%).
The petitioners for the investigations are AK Steel Corporation, ArcelorMittal USA LLC, Nucor Corporation, Steel Dynamics, Inc., and United States Steel Corporation. The domestic manufacturers have long blamed foreign governments, particularly China’s, for illegally subsidizing exports and they have to be happy with today’s decisions. This is also one of the first cases to be heard under Commerce’s newer, more stringent subsidy definitions and, again, domestic producers are likely satisfied with the performance of the new system, even though these decisions are only a preliminary determination.