On Monday, President Obama signed into law the bill that contains the “Level the Playing Field” act. This is the bill that made some potentially significant changes to trade laws, including changing the criteria for “material injury” findings and increasing penalties for foreign respondents that do not provide information requested by the Commerce Department.
This provision closes loopholes and codifies important Department of Commerce practices, providing support to domestic industry users of U.S. trade remedy laws— such as the steel and steel products, paper, and chemicals industries, as well as labor and trade unions. Level the Playing Field will enhance the Department of Commerce’s ability to get the information it needs in antidumping and countervailing duty proceedings, including from non-cooperative foreign companies and governments. It will also enhance the International Trade Commission’s ability to assess injury caused to American manufacturers and their workers by unfairly traded imports. Other provisions of the legislation further support the effective enforcement of our antidumping and countervailing duty laws by codifying existing Department of Commerce practices that help stop unfair pricing by foreign exporters or subsidization by their governments.
SMU spoke with attorney Lewis Leibowitz on Monday afternoon about the changes coming regarding the definition of “injury” and new rules on the collection of facts regarding steel imports affected by antidumping and countervailing duty cases. Sandy Williams of Steel Market Update has been following the legislation and writing about the potential changes for a number of months. Both the U.S. House of Representatives (House) and the U.S. Senate (Senate) have passed trade legislation that includes the language lobbied for by the steel mills and their supporters.
The questions which remain are many and the answers are not cut and dried, as in most cases when dealing with legal interpretation of the new language, which Mr. Leibowitz advised SMU will almost surely happen.
Mr. Leibowitz pointed out that the changes in the statute in the bill signed on Monday did not dramatically change the law or current policy. The changes are more subtle and indirect—much depends on the reactions of the Commerce Department and the International Trade Commission, the agencies that process and decide trade cases.
For example, the new law makes explicit that a profitable industry may not be found uninjured merely because it was profitable. However, that was never the case. He advised us that there have been cases in the past where injury was found where the industry was profitable, but profits declined as a result of subject imports.
Lewis also noted that potential petitioners want to be sure that their petitions will give them relief. However, certainty is not likely to be attained by these changes. Some petitions will be more compelling than others, and circumstances can and do change between the filing of the petition and the final injury vote more than a year later. Trade cases essentially impose protective duties on covered merchandise. Any legal system that automatically grants high tariffs merely upon request would be unfair to other segments of the economy. Under the law as it already existed, the vast majority of cases did result in relief.
If the steel mills sense that it will be easier to win trade suits then there will likely be more of them. SMU opinion is we should know in the next few months if the mils perceive that the likelihood of winning is improved. If so, look for new cases on products from China and other countries not already covered by cases.
But, Leibowitz said, “These battles are never completely over. In steel, there are fewer than 100,000 workers in the steel industry. There are more than 100,000 businesses that use steel in their manufacturing process and they have about 8 million workers. If they are threatened by massive new tariffs, especially on products not made in the US, there is likely to be a backlash.”
There are two major changes in the new law. The first change modifies the criteria for “material injury.” “The target audience for these changes is the ITC Commissioners,” said Mr. Leibowitz. “It is they who determine whether or not the industry has been injured or threatened with injury by the imports from the subject countries.”
The other major changes relate to the Commerce determination of “facts available” in cases where the respondents do not supply all information requested by Commerce on a timely basis. The law increases the tools Commerce has to impose higher duties as a result of lack of full cooperation. Under the previous law, failure to cooperate was likely to lead to dumping and subsidy margins that would close the US market to those imports. The additional tools given to Commerce would make it harder for respondents to challenge those duties in court, but would not change the market-closing consequences very much, according to Lewis.
When asked if the existing investigation on coated products will be affected by the changes in the law Mr. Leibowitz told us that he is asking the same question. His opinion at this time is that the new law appears to be “effective on the date of enactment” which was Monday when President Obama signed the bill into law. He went on to say, “The new law will apply to any pending investigation unless there is a provision that sets another effective date.”
Attorney Lewis Leibowitz will be one of participants at this year’s Steel Summit Conference. He will be joined by Kevin Dempsey, Executive Vice President and General Counsel with the American Iron & Steel Institute (AISI). The AISI was one of the main groups lobbying for the Level the Playing Field language contained in the bill signed by President Obama on Monday. Also joining the panel will be Richard Chriss, Executive Director for the American Institute for International Steel (AIIS). We expect a lively conversation, especially considering the speaker prior to this panel will be former Nucor CEO Dan DiMicco who will talk about bringing manufacturing back to the U.S. shores.
To find more information about our program, speakers, location and costs, as well as how to register, please go to our website or contact our offices: 800-432-3475 or info@SteelMarketUpdate.com.
If you would like to contact attorney Lewis Leibowitz he can be reached at: firstname.lastname@example.org
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