Articles in Category: Anti-Dumping

Arcane as it sounds, by refusing to approve new judges to the World Trade Organization’s (WTO) appellate panel (a form of supranational court in all but name, a Telegraph article explains) the U.S. is depriving the panel of the resources to function.

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The panel should have seven judges, such that at least three are always available to hear cases. With one judge having retired, the panel is down to six; by the end of this month, it will be down to four.

There is already a 40-case backlog and resolutions are taking too long, the Telegraph reports. Reducing the panel’s capacity further would effectively disable one of the WTO’s most important and successful functions, which is to settle disputes between states in a rules-based environment.

The U.S. action is driven by a deep-rooted dissatisfaction with the way the WTO operates and is aimed at achieving change rather than a desire to leave – despite what President Donald Trump tweets in soundbites.

Not Playing by the Rules

Firstly, the U.S. believes — with considerable justification — that some large developing countries do not abide by the rules, or rather hide behind the rules.

China, for example, is the world’s second-largest economy and has a disproportionate share of global trade. Yet, its status as an emerging economy allows it to avoid many of the constraints placed on developed economies.

Even after 16 years of WTO membership, China still has a massive state sector enjoying far-reaching subsidies and favored treatment by the state. In fact, recent actions in the name of combating pollution have, if anything, concentrated steel production even more among state producers as China, has shut 100,000 tons of electric arc furnace (EAF) private production capacity, thus concentrating and supporting power among the largely state-owned traditional blast furnace producers.

U.S. Perception of WTO Activism

The second issue is the U.S. believes the WTO has become more activist over time, deliberately dismantling protectionist measures in its rulings, ostensibly in the name of promoting global trade but to the detriment of major importers (like the U.S.).

Some will undoubtedly criticize the U.S. for its actions, but better to force through change than wholesale resignation from the organization and the rules-based system that has done so much over the last 20 years to resolve disputes amicably and avoid trade wars.

Even if changes are accepted to the WTO rules, patterns of global trade will take time to adjust.

Steel jobs are not going to flood back to the U.S., regardless of the president’s assurances. As the article points out, the U.S. already has massive tariffs in place against Chinese steel, but the U.S. steel industry is not powering back to employment levels seen before the WTO.

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Trade imbalances within the North American Free Trade Agreement (NAFTA) fall outside of the WTO remit and are a topic in their own right, but arguably the U.S. imbalances with the rest of the world have gone on for long enough.

Providing a ready and reliable export market to emerging economies has lifted hundreds of millions out of poverty and achieved an industrial revolution in Asia and South America; that should now allow those countries to trade on equal terms.

This morning in metals, some big news on the international trade and steel imports front.

The U.S. Department of Commerce yesterday announced preliminary affirmative rulings that corrosion-resistant steel (CORE) and certain cold-rolled steel flat products (cold-rolled steel) imported from Vietnam “produced from substrate originating in…China are circumventing existing antidumping and countervailing duty (AD/CVD) orders on CORE and cold-rolled steel imported from China,” according to their news release.

The Details on Duties

“The Commerce department has directed the United States’ customs and border protection agency (CBP) to collect anti-dumping (AD) and Countervailing Duty (CVD) cash deposits from importers of CORE produced in Vietnam using Chinese-origin substrate at rates of 199.43 percent and 39.05 percent, respectively,” according to this article, writing from the release. “CBP has also been directed to collect AD and CVD cash deposits on imports of cold-rolled steel produced in Vietnam using Chinese-origin substrate at rates of 265.79 percent and 256.44 percent, respectively.”

What This Means for Metal Buyers

Many in the steel manufacturing are hailing the decision as a victory as far as solidifying the case against China when it comes to proving that country’s circumvention and “substantial transformation” tactics.

The decision on CORE and cold-rolled products may open the door for the steel pipe and tube industry to file or follow up on similar cases.

Learn more on Trade Circumvention here, including a free white paper download on the topic.

Listen to our MetalMiner Podcast series, “Manufacturing Trade Policy Confidential,” for more discussion around circumvention and other trade topics that matter to metal buyers.

Just as legislators in the U.S. and Europe are taking increasingly strident action to curb imports from countries like China under anti-dumping legislation, the tools available to them are being withdrawn.

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Historically, China and a number of other emerging markets have been classified as non-market economies. This means that the state plays a major role in allocating resources and setting prices, making the cost of products less relevant to the economies of manufacture. Under U.S. law, a non-market economy is defined as one that does not operate on market-based principles, and therefore, its prices for final goods do not (necessarily) reflect fair value.

We talk of China in this context because the country is the world’s largest non-market economy, but it is far from alone: there are many other emerging and previously emerging markets that are classified accordingly.

There lies the problem. China is being reclassified, at least in Europe, under a deal negotiated in October. The Telegraph reports that the full European Parliament then offered its endorsement last month, just leaving national governments to give their final approval on December 4.

China has been pushing hard for its economy to be re-classified. Some suggest that the EU agreement was in part motivated by a desire to improve trade with China. After the U.S., the EU is China’s second largest trade partner.

However, many European manufacturers are probably thinking, “Be careful what you wish for.”

As the article points out, these changes mean it will be harder for European companies to argue they are competing against subsidised competitors, with the new system being more flexible in determining whether domestic producers are being undercut. Anti-dumping measures are in place for some grades and forms of steel and for aluminium foil at present, both of which would be harder to renew if the change in status is accepted. Read more

Media coverage of the Section 232 investigations — which could potentially curb imports of steel, stainless steel and aluminum into the U.S. — have spooked importers, consumer groups and some manufacturing industries.

These fears are misplaced, according to Barry Zekelman, executive chairman and chief executive officer of Zekelman Industries. “Steel has been the most abused product on the planet,” he says.

What makes Zekelman’s point of view on trade so fascinating?

The fact that he is not a steel producer! (That, and his ever-colorful examples…our headline above is a case in point.) Take a listen to our conversation:

The Rise of Zekelman Industries

His story sounds like the American dream – a tale of how Zekelman and his brothers were thrust into their father’s fledgling business after their father’s sudden passing. He left college as a freshman to help save the pipe manufacturer.

Read more

The U.S. Department of Commerce. qingwa/Adobe Stock

The U.S. Department of Commerce announced an action that it hasn’t taken in over a quarter of a century.

On Tuesday, the department announced it had self-initiated countervailing duty (CVD) and anti-dumping (AD) investigations with respect to Chinese common alloy aluminum sheet.

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“These historic investigations, the first in over a quarter century, were self-initiated pursuant to the authority granted to the Secretary under the Tariff Act of 1930, as amended,” the Department of Commerce said in a prepared statement.

Secretary of Commerce Wilbur Ross underscored the administration’s goal of targeting what he called “unfair trade practices.”

“President Trump made it clear from day one that unfair trade practices will not be tolerated under this administration, and today we take one more step in fulfilling that promise,” Ross said in the release. “We are self-initiating the first trade case in over a quarter century, showing once again that we stand in constant vigilance in support of free, fair, and reciprocal trade.”

According to the department, imports of common alloy sheet from China were valued at an estimated $603.6 million in 2016.

Typically, such investigations are prompted by petitions filed by entities within the domestic industry. The secretary of commerce, however, has the authority to self-initiate a CVD or AD investigation if it is determined that such a probe is warranted.

The department last self-initiated a CVD investigation in 1991, when it investigated softwood lumber from Canada. The last self-initated AD case came in 1985, when the department looked at semiconductors from Japan.

According to the release, the merchandise subject to investigation is “common alloy aluminum sheet, which is a flat-rolled aluminum product having a thickness of 6.3 mm or less, but greater than 0.2 mm, in coils or cut-to-length, regardless of width.” The material is typically used in building and construction, transportation, basic electrical applications, and appliances.

“The Department has self-initiated these investigations based on information indicating that the United States price of common alloy sheet from China may be less than the normal value of such or similar merchandise and that imports of common alloy sheet from China may be benefitting from countervailable subsidies,” the department release added. “The Department also has evidence that imports of common alloy sheet from China may be materially injuring, or threatening material injury to, the domestic industry producing common alloy sheet in the United States.”

The domestic aluminum industry applauded the announcement from the Department of Commerce.

“The Aluminum Association and its members enthusiastically support the decision announced today by the Department of Commerce and Secretary Wilbur Ross to self-initiate unfair trade investigations concerning imports of common alloy sheet from China,” said Heidi Brock, president and CEO of the Aluminum Association, in a prepared statement. “We are extremely grateful for the efforts and leadership of Secretary Ross in vigorously enforcing the U.S. trade laws.

“The Aluminum Association and its members seek to help ensure that common alloy sheet from China entering the United States is fairly traded.” 

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Final determinations by the Department of Commerce in the cases are scheduled for April 2018 for the CVD investigation and July 2018 for the AD investigation.

axe_olga/Adobe Stock

This morning in metals news, the U.S. Department of Commerce launched an anti-dumping and anti-subsidy probe into Chinese aluminum imports, oil prices rise above $60/barrel and copper prices fall for a third consecutive day.

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Commerce Dept. Launches Aluminum Probe

On Tuesday, the U.S. Department of Commerce launched an anti-subsidy and anti-dumping probe of imported Chinese aluminum alloy sheet, Reuters reports. Beijing is less than happy about the investigation and released a strongly-worded statement on Wednesday, arguing that the move 10would harm both countries.

What sets this probe apart is that it was initiated by the Commerce Department itself, whereas usually these investigations are requested by companies and industries claiming harm from imports. The last time the Commerce Department initiated an anti-subsidy probe was in 1991, on Canadian softwood lumber.

If the probe proceeds, preliminary anti-subsidy and anti-dumping duties could be issued in February and April 2018, respectively.

The End of the Global Oil Oversupply?

Is it the beginning of better days for oil exporters? OPEC and Russia’s agreement last year on oil production cuts has helped prices recover. Brent crude oil reached $64 a barrel this week, the New York Times reports, and some analysts are expecting prices to top $70 next week. Read more

The U.S. Department of Commerce. qingwa/Adobe Stock

This morning in metals news, the U.S. Department of Commerce announced an affirmative ruling in its anti-dumping investigation of carbon and alloy steel wire rod from Belarus, Russia and the United Arab Emirates (UAE), Nucor announces it will build a new steel mill in Missouri and the zinc price moves up on supply tightening concerns.

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DOC Issues Affirmative Ruling on Wire Rod

The U.S. Department of Commerce announced an affirmative determination in its anti-dumping duty investigation of carbon and alloy steel wire rod imports from Belarus, Russia and the UAE.

“The United States is dedicated to free, fair, and reciprocal trade with these countries, and this case was decided strictly on a full and fair assessment of the facts,” Secretary of Commerce Wilbur Ross said in a prepared statement. “The Department of Commerce is committed to protecting U.S. companies being hurt by foreign manufacturers that refuse to play fair.”

Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits from importers of wire rod at the following rates: Belarus (280.02%), Russia (436.80–756.93%) and the UAE (84.10%).

Nucor Announces New Sedalia, Missouri Facility

Nucor announced Tuesday that it plans to build a rebar micro mill in Sedalia, Missouri, scheduled to open in 2019.

The new mill represents approximately $250 million in investments, according to a Nucor release on the announcement.

“This rebar micro mill project is consistent with our long-term strategy for profitable growth and builds on our position as a low-cost producer,” said John Ferriola, chairman, CEO and president of Nucor, in the release. “Strategically positioning this micro mill in the Kansas City area will give us a sustained cost advantage over other domestic steel producers supplying rebar from outside the region.”

Zinc Prices Rise

Zinc reached its highest price in more than a week on Wednesday, Reuters reported.

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The price increase came as a result of worries about supply shortages, as well as solid performance in Chinese steel futures, according to the report.

Before we head into the weekend, let’s take a look back at the week that was:

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Free Download: The November 2017 MMI Report

President Donald Trump may not have said much, if anything, about China’s steel exports during his recent tour. Both European and U.S. legislators, however, are carrying out investigations into not just simple dumping but more complex and illegal activities, such as shipping via third parties to hide the origin and avoid pre-existing dumping tariffs.

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A Reuters article this week explains how the European Union’s anti-fraud office (OLAF) said it has found Chinese steel was shipped through Vietnam to evade the bloc’s tariffs.

In part, the current case may be a matter of timing.

Read more

Welcome to the (re)launch of the MetalMiner Podcast!

(We’re calling it a relaunch because, well, remember this?)

With everything that’s been happening on the international trade policy front over the past year, we wanted to give metal buying organizations more insight into the issues they may not be reading or hearing enough about — or at all — in the mainstream B2C media.

What better way to do so than go straight to the source — or sources — and interview some key movers and shakers on the manufacturing and policy fronts? So we’re starting a brand-new series called “Manufacturing Trade Policy Confidential.”

New Series: Manufacturing Trade Policy Confidential

In this first episode of the series, MetalMiner Executive Editor Lisa Reisman interviews Michael Stumo, CEO of the Coalition for a Prosperous America.

Stumo’s concerns, and those of his organization, cut across industry sectors and political leanings. In this conversation, Stumo outlines what he sees as the most crucial elements to consider in today’s trade environment, touching on everything from China to the German Mittelstand to Alexander Hamilton as economic visionary.

Manufacturing Trade Policy Confidential: Background

If you’ve visited MetalMiner’s digital pages over the past several months, you’re no stranger to the phrase “Section 232” — shorthand for the U.S. Department of Commerce investigation into whether certain steel imports constitute a national security risk, under the namesake section of the U.S. Trade Expansion Act of 1962.

The outcome of the investigation (findings from which were slated to come down last summer but have been delayed) could have significant effects on upstream and downstream manufacturing organizations, ranging from metal producers to buying organizations – even the mom-and-pops.

But Section 232 is only one small part. Trade circumvention, China’s non-market economy status, domestic uncertainty amidst proposed tax plans and many other issues have pushed us to start this new podcast series.

We’ll be publishing several more interviews in the coming weeks and months – stay tuned!

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