Trade Cases

Malaysia Coated Sheet Made From China, Taiwan Substrate Circumvents Duties: Commerce

June 7, 2021

The U.S. Commerce Department has determined that coated flat-rolled steel made in Malaysia from Chinese or Taiwanese substrate circumvents U.S. anti-dumping and countervailing duties.

As a result, coated product from Malaysia could be subject to duties of more than 200% if it is determined to be made from Chinese hot-rolled coil or cold-rolled coil, according to government notices dated Tuesday, June 7.

globe arrows That’s because Chinese coated flat-rolled steel is subject to anti-dumping rates of 199.43% and countervailing duties of as much as 39.05%, according to Commerce records published in the Federal Register.

Material coated in Malaysia and made from Taiwanese hot-rolled or cold-rolled substrate is subject to lower duties. That’s because Taiwanese coated flat-rolled steel is subject to a much lower anti-dumping rate of 3.66%, per Commerce.

To avoid duties, importers of coated flat-rolled steel from Malaysia must provide proof that the hot-rolled or cold-rolled substrate it was made from does not come from China or Taiwan, the department said. The rates for China will be applied if no certification is provided for the origin of the substrate.

“This is to prevent evasion, given that the rates applicable to the AD/CVD orders on CORE from China are higher than … the AD order on CORE from Taiwan,” Commerce said.

Coated flat-rolled steel refers to product such as hot-dipped galvanized, in which a hot-rolled or cold-rolled coil is run through a bath of molten zinc to prevent rust. Commerce officially refers to such products as corrosion-resistant steel products, or “CORE”.

The action this week followed a preliminary determination made on February 18, 2020, Commerce said.

The U.S. has imported only very limited quantities of coated products from Malaysia over the last two years, according to Commerce figures.

When it comes to hot-dipped galvanized, for example, the U.S. has imported no material from Malaysia since October of last year.

Separately, Commerce determined that coated flat-rolled steel from South Africa made from Chinese substrate is not circumventing U.S. duties “at this time,” according to a separate entry in the Federal Register.

The U.S. initially filed duty circumvention cases against coated flat-rolled steel from Vietnam in the waning days of the Obama administration in 2016. Those cases set a precedent for similar trade actions filed against other countries during the Trump years.

By Michael Cowden, Michael@SteelMarketUpdate.com

Michael Cowden

Michael Cowden is managing editor for Steel Market Update. Cowden has covered the steel industry since 2007. He specializes in flat-rolled steel but has also reported on steel long products, steel pipe and tube, and aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.