What is “Injury” in a Trade Suit?

Written by John Packard

Steel Market Update has been asked a number of times to define, or help our readers to understand, what is “injury” when it comes to the domestic steel industry.

Last week we heard from trade attorney Larry Friedman at the Association of Steel Distributors Meeting in Chicago that injury was losing sales, the lowering of prices in the domestic market or the inability to raise prices.

SMU thought that this subject lends itself to a wider discussion as injury, as we understand it from past conversations with various attorneys, has more to do with what the ITC commissioners believe and can, therefore, be a bit of a moving target.

We went to trade attorney Lewis Leibowitz of The Law Office of Lewis E. Leibowitz and asked him for his help in trying to understand “injury” as it relates to an antidumping trade case.

He told us:

There are three ways to show injury:

1. Current material injury
2. Imminent threat of future injury
3. Material retardation of the establishment of an industry

In the new corrosion resistant case, there is no question of material retardation, because the industry has long been established in the US. Current injury and threat are the two issues.  A finding of either current injury or threat is considered “affirmative.”  Thus, a finding of current material injury by two Commissioners and a finding of threat by a third would mean an affirmative finding by the Commission.

Second, the injury findings must find some correlation between harm to the domestic industry taken as a whole and import trends (quantity, pricing, import penetration).  Imports have clearly been increasing lately.  The fortunes of the publicly held companies in the industry are available for all to see—but not in the detail the Commission looks at.  They will review employment, wages, profits, sales and other evidence of performance only for the “domestic like product” (corrosion resistant flat products), not the companies as a whole.  Thus, we really don’t know how they have been doing until the data are presented.  Much of it will not be available publicly in any event, because it is confidential.  

Third, there are two injury proceedings—preliminary and final.  The preliminary phase is first, and is supposed to be finished within 45 days after the petition is filed.  The stated deadline is July 27.  So we will know the outcome long before the conference in September [SMU Steel Summit Conference].  In the preliminary phase, the Commissioners will determine whether there is a “reasonable indication” of material injury or threat by reason of subject imports to the domestic industry.  The final injury phase will commence after the preliminary Commerce determination, culminating in a Commission vote about one year from now.  In the final determination, the Commissioners will determine whether there has been material injury or whether there is an imminent threat of material injury.

In the vast majority of cases, the preliminary determination is affirmative.  In the final determination, about 25 percent of cases go negative.

Attorney Lewis Leibowitz will join Kevin Dempsey Executive Vice President and General Counsel of the American Iron and Steel Institute (AISI) to discuss this and other trade related topics at this year’s Steel Summit Conference in Atlanta. Mr. Leibowitz will attend the full conference and is available to speak with those who will be attending the conference on September 1st and 2nd.

Steel Market Update is also working with Mr. Leibowitz and others to provide a much more detailed discussion on international trade and what manufacturing companies, distributors and trading companies need to do to protect themselves, have a better understanding of the law and how the process works. This will be done in an intimate setting for a small group of executives at our 1st Leadership Conference which will be held at PGA National Resort & Spa at Palm Beach Gardens, Florida on March 8 & 9, 2016.

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