Trade Cases
All Exclusions Denied on HR AD Trade Suit
Written by John Packard
March 17, 2016
There is much more to each of the trade cases than the preliminary and final announcements might have you believe. There are inconsistencies in the rulings where attorneys and clients alike scratch their heads to figure out how the U.S. Department of Commerce came up with their preliminary determination deposit rates. The second item not readily understood or discussed is what happens to those requests made by U.S. manufacturing companies (or the traders servicing those companies) on steel products the manufacturers hope will be excluded from the scope of the investigation?
Brazil: CSN vs. Usiminas
We spoke with trade attorney Lewis Leibowitz about the hot rolled dumping ruling shortly after it was announced to get some insights into the ruling. One of the first matters discussed was why did Usiminas out of Brazil receive almost the exact same dumping margin as CSN? Both CSN and Usiminas were identified by the US DOC as mandatory respondents in the AD case on HRC.
When all was said and done on the preliminary investigation we saw Usiminas get a margin rate of 34.28 percent while CSN’s rate was 33.91 percent. Usiminas rate was determined by “adverse facts available” which means the rates were based on adverse inferences because Usiminas did not participate fully or in a timely fashion. CSN, however, did spend the money to defend their company and their rate is 0.37 percent lower than Usiminas…?
Scope Exclusion Requests
The U.S. Department of Commerce on Wednesday released a general scope memorandum rejecting all requests for exclusions. Good examples of exclusion requests are USS/Posco and Steelscape. Both of these companies are conversion mills located on the west coast of the United States. Steelscape is a 100 percent foreign owned mill (Australia and Japan) while USS/Posco is a joint venture between US Steel and POSCO out of Korea. In past trade cases these mills have been excluded from having to participate in the suits.
This time the petitioners (domestic steel mills including US Steel) argued that they should not be excluded and they should be subject to any margins levied by the US DOC.
Here is what Lewis Leibowitz had to say on the subject, “I also wanted to comment on scope issues. The Department of Commerce issued a general scope memorandum…rejecting all requests for exclusion from the scope by several foreign companies. Commerce reiterated a point that may be a surprise to some: that the domestic industry can cover a product even if they don’t make it. They only have to produce the broad ‘class or kind of merchandise’ included in the scope in order to file a petition. The Commerce Department typically does not require or even encourage exclusion of products that are not made by domestic producers. In response to broad product coverage, US consumers will either shift their business to countries that are not covered or move their facilities outside the United States and send their finished products (which are not covered by the case) into the US market, eliminating jobs in the process. Steel consumers have made numerous efforts to change the law to prevent these job losses, but all have been vigorously (and so far successfully) opposed by the domestic steel industry.”
Steel Market Update is in contact with both USS/POSCO and Steelscape as we try to understand if the HRC ruling will impact the production or supply for either of these companies.
John Packard
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