Trade Cases

Section 337 Trans-shipment Claim Under Review

August 22, 2017

U.S. Steel’s Section 337 allegations of trans-shipment of Chinese steel products are being challenged by seven Chinese steel mills.

U.S. Steel alleges that respondents in the case are misrepresenting country of origin in steel shipments in order to elude antidumping and countervailing duties. Baosteel Group, HeSteel Group, Masteel Group, Shougang Steel Group, Shagang Steel Group, WISCO Steel Group and Ansteel Group are challenging that claim, asserting that U.S. Steel has not provided sufficient evidence to support its allegations.

Motions for summary determination filed by the seven are under review by Administrative Law Judge Dee Lord. U.S. Steel has filed counter motions claiming that the standards proposed by respondents for determining trans-shipment are impossibly high to prove and would be prohibitive to future 337 investigations.

The motion filed on July 18 by Baosteel, and made public, claims that U.S. Steel is basing its claims of false designation of origin on anecdotal reports from customers without any “material fact.”

Baosteel also said U.S. Steel was falsely interpreting the increase in imports from other countries to the U.S., following trade actions that diminished steel trade from China, as evidence of illegal importation activity. The U.S. Steel claim of injury is unsubstantiated by evidence, said Baosteel.

“Without the ability to identify injury specifically attributable to Baosteel’s alleged FDO importation or sales, U.S. Steel has only a suspicion that FDO importation or sales has contributed to its alleged injury,” stated the Baosteel motion. “This unsubstantiated suspicion is not sufficient to prove a causal relationship between Baosteel’s alleged unfair acts and U.S. Steel’s injury. And without such a causal relationship, no genuine issue of material fact exists with respect to the required element of injury. Summary determination on both the false association and false advertising claims is therefore appropriate.”

In its counter motion, U.S. Steel argues the motions for summary determination hold the company to a “far more onerous standard” for proving injury than is statutorily required.

U.S. Steel maintains that the International Trade Commission holds that to satisfy a claim of injury “a complainant need only show ‘a causal nexus between the unfair acts of the respondents and the injury’; this requirement does not mean that the unfair acts must be the only or even principal cause of the injury.”

The claim of trans-shipment was originally dismissed by Lord in January 2017. In February, the ITC reversed the initial determination and remanded the claim back to Lord for further review. The matter is now scheduled for an evidentiary hearing in mid-October.