WASHINGTON, July 12, 2016 /PRNewswire/ -- Today, the U.S. Department of Commerce announced its preliminary determination that imports of stainless steel sheet and strip ("SSSS") from China are benefitting from unfair government subsidies. As a result, it will instruct U.S. Customs and Border Protection ("CBP") to begin to require U.S. importers of SSSS from China to deposit estimated countervailing duties at the time of importation. Further, based on its previously announced preliminary affirmative critical circumstances determination, the Commerce Department will instruct CBP to suspend liquidation of all entries of SSSS from China that were imported into the United States on or after the date that is 90 days prior the date of publication in the Federal Register of the affirmative preliminary countervailing duty determination, and to require U.S. importers to post security equal to the preliminary subsidy rates on those entries.
The Commerce Department's determination follows the filing, on February 12, 2016, of antidumping and countervailing duty petitions by domestic producers AK Steel Corporation (NYSE: AKS), Allegheny Ludlum, LLC d/b/a ATI Flat Rolled Products, an Allegheny Technologies company (NYSE: ATI), North American Stainless, and Outokumpu Stainless USA, LLC.
Based on information gathered to date, the Commerce Department calculated a preliminary subsidy margin of 57.30 percent of the value of the imported SSSS for Shanxi Taigang Stainless Steel Co., Ltd., the sole Chinese respondent that was analyzed by the agency. The Commerce Department assigned a preliminary subsidy margin of 193.12 percent to shipments of SSSS by all other producers and exporters in China, including Ningbo Baoxin Stainless Steel Co., Ltd. and Daming International Import Export Co., Ltd., both of which failed to participate in the Commerce Department's investigation after being selected as a mandatory respondents. The Commerce Department investigated numerous subsidy programs based on allegations contained in the domestic industry's petition.
John M. Herrmann, of Kelley, Drye & Warren LLP, counsel to the domestic industry, stated, "We are very pleased with the Commerce Department's affirmative preliminary determination that the Government of China provides unfair subsidies to its domestic producers of stainless steel sheet and strip. The requirement that U.S. importers begin to post estimated countervailing duties on shipments of stainless steel sheet and strip from China will help to eliminate unfair trade and restore a level playing field in the U.S. market."
The next step in this trade action will be the Commerce Department's issuance of its final countervailing duty determination, which is likely to be completed on or about January 30, 2017. In addition, the Commerce Department is currently scheduled to issue its preliminary antidumping determination on Monday, September 12, 2016. If an affirmative preliminary antidumping determination is issued by the Commerce Department, U.S. importers will be required to post cash deposits or bonds on all future entries of SSSS from China in the amount of the subsidy and dumping margin calculated by the agency.
Imports of stainless steel sheet and strip from China increased by 133 percent between 2013 and 2015. China was the largest supplier of stainless sheet and strip to the U.S. market in 2015, accounting for almost half of all imports. This surge in imports of stainless steel sheet and strip from China was driven by low import pricing that caused U.S. producers to lose significant sales and profits.
Stainless steel sheet and strip is a flat-rolled alloy steel containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. Stainless steel sheet and strip is used in consumer and industrial applications where the corrosion resistance, heat resistance, or design characteristics of stainless steel are required.
The petitioners are represented in these actions by Kathleen W. Cannon, David A. Hartquist, John M. Herrmann, and Grace W. Kim of the law firm Kelley Drye & Warren LLP.
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SOURCE Kelley Drye & Warren LLP