Antidumping And Countervailing Duty (Ad/Cvd) Petitions Filed Against Certain Corrosion-Resistant Steel Products From Australia, Brazil, Canada, Mexico, The Netherlands, South Africa, Taiwan, Turkey, The United Arab Emirates, And Vietnam

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On September 4, 2024, antidumping and countervailing duty petitions were filed with the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) concerning imports of Certain Corrosion-Resistant Steel Products from Australia, Brazil, Canada, Mexico, The Netherlands, South Africa, Taiwan, Turkey, The United Arab Emirates, and Vietnam. AD petitions concern unfair pricing practices (i.e., “dumping”), generally defined as selling imported goods in the U.S. market below their home market prices or the cost of production. CVD petitions concern competitive distortions caused by unfair government subsidies. If AD/CVD investigations are initiated by the DOC, they can lead to year-long investigations and the potential for additional duty liability for the imports concerned.

Importantly, although AD/CVD investigations center on the practices of foreign producers, exporters, and governments, it is the U.S. importer of record that is liable for any additional AD or CVD duties resulting from the investigations. Thus, both foreign producers/exporters and U.S. importers of the merchandise subject to AD/CVD investigations have a vested interest in their outcome. Given the rapid pace of such proceedings, affected foreign producers/exporters and U.S. importers are strongly encouraged to quickly assess the implications and determine whether to defend their interests in the investigations.

The table below outlines the type of investigation requested for each country in the petition:

Petitioner(s)

The petitions in question were filed by (1) Steel Dynamics, Inc., (2) Nucor Corporation, (3) United States Steel Corporation, (4) Wheeling-Nippon Steel, Inc., and (5) the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC.

Product Scope

The products covered by the scope of the petitions are as follows:

For purposes of these investigations, the products covered are certain flat-rolled steel products, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished, laminated, or coated with plastics or other non-metallic substances in addition to the metallic coating. The products covered include coils that have a width of 12.7 mm or greater, regardless of form of coil (e.g., in successively superimposed layers, spirally oscillating, etc.). The products covered also include products not in coils (e.g., in straight lengths) of a thickness less than 4.75 mm and a width that is 12.7 mm or greater and that measures at least 10 times the thickness. The products covered also include products not in coils (e.g., in straight lengths) of a thickness of 4.75 mm or more and a width exceeding 150 mm and measuring at least twice the thickness. The products described above may be rectangular, square, circular, or other shape and include products of either rectangular or non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges).

For purposes of the width and thickness requirements referenced above:

(1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above, and

(2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-sections, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

Steel products included in the scope of these investigations are products in which: (1) iron predominates, by weight, over each of the other contained elements; and (2) the carbon content is 2 percent or less, by weight.

Subject merchandise also includes corrosion-resistant steel that has been further processed in a third country, including but not limited to annealing, tempering, painting, varnishing, trimming, cutting, punching and/or slitting or any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the in-scope corrosion resistant steel.

All products that meet the written physical description are within the scope of these investigations unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of these investigations:

Flat-rolled steel products either plated or coated with tin, lead, chromium, chromium oxides, both tin and lead (“terne plate”) or both chromium and chromium oxides (“tin free steel”), whether or not painted, varnished or coated with plastics or other non-metallic substances in addition to the metallic coating;

Clad products in straight lengths of 4.7625 mm or more in composite thickness and of a width which exceeds 150 mm and measures at least twice the thickness;

Certain clad stainless flat-rolled products, which are three-layered corrosion-resistant carbon steel flat-rolled products less than 4.75 mm in composite thickness that consist of a carbon steel flat-rolled product clad on both sides with stainless steel in a 20%-60%-20% ratio; and

Also excluded from the scope of the antidumping duty investigation on corrosion-resistant steel from Taiwan are any products covered by the existing antidumping duty order on corrosion-resistant steel from Taiwan. See Certain Corrosion-Resistant Steel Products From India, Italy, the People’s Republic of China, the Republic of Korea and Taiwan: Amended Final Affirmative Antidumping Determination for India and Taiwan, and Antidumping Duty Orders, 81 Fed. Reg. 48,390 (Dep’t Commerce July 25, 2016).

It is important to remember that it is the physical description of the product that is controlling. The provided HTSUS numbers are for reference purposes only.

The AD/CVD Process

AD/CVD investigations are bifurcated proceedings administered by two government agencies -- the DOC and the ITC. The DOC controls the initiation process for any investigation and is also responsible for determining the degree of dumping or subsidization. The ITC is responsible for determining whether the imports concerned are causing or threaten to cause “material injury” to the U.S. domestic industry. Importantly, there must be affirmative findings of dumping and/or subsidization by the DOC and material injury or threat thereof by the ITC for the possibility of AD/CVD duties to apply through what is known as an AD or CVD “order.” If either agency reaches a negative conclusion, no order may be imposed.

AD/CVD investigations are also sequential, with staggered preliminary and final phase determinations issued by the DOC and the ITC. The first preliminary determination is issued by the ITC, followed by a preliminary DOC ruling. In the final phase, the DOC issues its final determination first, followed by the ITC. At the preliminary stage, if the ITC reaches a negative injury finding, the investigation is terminated. In the final phase proceedings, if either the DOC or ITC reach negative findings, the investigations are also terminated.

AD/CVD investigations are fact-intensive, characterized by short deadlines and significant data and document demands. The key investigative tool for both the DOC and the ITC is the questionnaire, with the DOC often relying on both an initial questionnaire and multiple supplemental questionnaires that follow thereafter. These are technical documents that require significant expertise to complete and submit in proper form.

In AD/CVD investigations, potential duty liability normally first accrues with release of the DOC’s preliminary determination. If AD or CVD margins are found, U.S. importers are required to begin posting deposits with U.S. Customs and Border Protection (“CBP”) on all entries of the imports under investigation moving forward. Depending on future circumstances, those deposits could be liquidated by CBP as additional duty liability, or refunded in part or in whole.

AD/CVD orders may be reviewed annually, and determined margins of dumping and subsidy revised on a retrospective basis, effecting entries made over the past year. This means that actual duty liability is initially unknown and may be more or less than deposits made over the preceding annual review period. AD/CVD orders are up for termination every 5 years under a “sunset” review process, put typically last 15 or more years.

Next Steps

The DOC will normally issue an initiation determination within 20 days of receipt of the petitions. Initiation delays are otherwise rare and typically involve questions of standing and whether the Department is satisfied that the petitions were filed on behalf of the U.S. domestic industry. Once initiation occurs, AD/CVD investigation proceed along a rapid timeline, making it critical for affected foreign producers/exporters and importers to quickly engage to understand the implications and determine whether to defend their interests in the proceeding. To illustrate, the ITC will issue questionnaires and typically schedule a staff conference with interested parties 21 days after the petition is filed, before rendering a preliminary determination 45 days after the petition is filed, as required by law.

Some of the important dates related to the instant petition(s) are set forth below:

AD Case Schedule

Cut-off date for AD critical circumstances period: 2-Jan-25. This is the point up to which retroactive duties could be applied if a critical circumstances determination is made by the DOC during the investigation.

CVD Case Schedule

Cut-off date for CVD critical circumstances period: 3-Nov-24. This is the point up to which retroactive duties could be applied if a critical circumstances determination is made by the DOC during the investigation.

* Note that these are estimated dates based on the statutory deadlines. They do not take into account if deadlines fall on a weekend (in which case the date will move to the next business day) or the lag between the deadline and publication of a decision in the Federal Register, which can add 3–5 days.

If you have questions regarding this matter, please contact the Curtis International Trade Team for more information.