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Client Alert: New AD and CVD Petitions Target Cold Drawn Mechanical Tubing of Carbon and Alloy Steel from China, Germany, India, Italy, Korea, and Switzerland

in AD/CVD

CERTAIN COLD-DRAWN MECHANICAL TUBING OF CARBON AND ALLOY STEEL FROM MULTIPLE COUNTRIES

U.S. Industry Files Antidumping Duty & Countervailing Duty Petitions

On April 19, 2017: U.S. tubing producers –ArcelorMittal Tubular Products, Michigan Seamless Tube, LLC, PTC Alliance Corp., Webco Industries, and Zekelman Industries Inc., filed petitions charging that unfairly-traded imports of Certain Cold-Drawn Mechanical Tubing of Carbon and Alloy Steel from the People’s Republic of China, Germany, India, Italy, the Republic of Korea, and Switzerland alleging that imports are causing material injury to the domestic industry.  The petitions allege that producers in each of the six countries are dumping mechanical tubing of carbon and alloy steel in the U.S. market at sizeable margins and furthermore that exports of cold-drawn mechanical tubing of carbon and alloy steel (“CDMT”) from China India are being unfairly subsidized:

Dumping occurs when a foreign company sells a product in the United States at less than its normal value.  Petitioners allege that various foreign manufacturers are dumping CDMT at significant margins.

Countervailable Subsidization occurs when a foreign government provides programs and incentives that likely provide unfair subsidies to producers of CDMT from various manufacturers.  Petitioners allege that China and India are providing countervailable subsidies to producers in those countries at, as yet, unknown levels.

The petition indicates the following margins of dumping:

Country Margin of Dumping
China 88.82% to 188.88%
Germany 148.32%
India 25.48%
Italy 37.23% to 69.13%
Korea 48.61%
Switzerland 52.41% to 57.82%

Antidumping & Countervailing Duty Proceedings

Antidumping investigations involve two separate parts:  an evaluation by the U.S. International Trade Commission of whether U.S. producers are being injured by reason of the imports, and a calculation by the U.S. Department of Commerce of the margin of dumping of individual exporters.

Countervailing investigations also involve two separate parts:  an evaluation by the U.S. International Trade Commission of whether U.S. producers are being injured by reason of the imports, and a calculation by the U.S. Department of Commerce of the margin of subsidization of individual exporters as well as an examination of the programs provided by the individual governments.

The U.S. International Trade Commission will initiate its investigation into whether CDMT imports from various countries injure the U.S. domestic industry, and will make its preliminary determination by approximately June 3, 2017.  Importers, producers, and exporters can participate in the U.S. International Trade Commission’s evaluation by filling out and sending in a questionnaire response about production, importation, and sales of CDMT.

The U.S. Department of Commerce will evaluate the petition to determine whether it contains allegations and evidence that is reasonably available to the Petitioners indicating that CDMT from the six countries are being dumped (sold at less than fair value) in the United States, and whether CDMT from China and India are also unfairly subsidized.  Commerce will determine whether to initiate its investigation by May 9, 2017.

Retroactive Duties may be required by U.S. Customs if there is an allegation of critical circumstances.  If so, imports arriving after April 19, 2017 (the date on which the petition was filed), but before the date of the preliminary countervailing duty determination (which can be as early as approximately July 13, 2017, may also be subject to the assessment of duties.  This means importers will be required to pay cash deposits on merchandise currently on the water.  TLD has developed effective strategies to reduce potential liability for such shipments.

Estimated Timeline:

Based upon the filing date of the petition key events at DOC and ITC will occur on approximately the following dates:

DOC Initiation May 9, 2017
ITC Questionnaires Deadline Early May 2017
ITC Conference May 10, 2017
ITC Post-Conference Brief May 15, 2017
ITC Preliminary Decision June 3, 2017
DOC Deadline for Quantity & Value Response Estimated late May 2017
DOC Respondent Selection Early June 2017
DOC Questionnaires Issued/Responses Due Mid July to September 2017
DOC CVD Prelim July 13, 2017 (unextended – The case will be extended by at least 60 days)
DOC AD Prelim September 26, 2017 (unextended – the case will be extended by at least 50 days)