Trade Cases

US DOC Releases Cold Rolled CVD and Critical Circumstances Rulings

Written by John Packard


The U.S. Department of Commerce released their Preliminary Determination for Countervailing Duty (CVD) on Cold Rolled products as well as Critical Circumstances on Cold Rolled. The headline is China was found to be receiving subsidies at a rate of 227.29 percent. They also found critical circumstances for the following companies: Angang Group Hong Kong Co., Ltd., Benxi Iron and Steel (Group) Special Steel Co., Ltd., and Qian’an Golden Point Trading Co., Ltd. Critical circumstances were not levied against any other Chinese mills.

The reason why the Chinese mills were hit so hard was they refused to participate in the investigative process.

Korean steel mills were found to not be de minimis which means their imports will not be charged a cash deposit.

Brazil (7.42%), India (4.45%) and Russia (6.33% except Severstal which was considered not to be receiving subsidies) were found to have been receiving subsidies.

The only countries to be hit with critical circumstances are Russia and the mills named above from China.

According to trade attorney Lewis Leibowitz, the margins found will not necessarily halt imports by themselves. However, there is still the antidumping (AD) section of the cold rolled trade suit waiting for its Preliminary Determination which will happen in late February.

The corrosion resistant antidumping (AD) Preliminary Determination is due next week and that ruling may provide us with a better blueprint for what to expect on the upcoming AD Preliminary Determinations on both cold rolled and hot rolled steels.

Here is a portion of the US Department of Commerce document announcing their ruling:

Commerce Preliminarily Finds Countervailable Subsidization of Imports of certain Cold-Rolled Steel Flat Products from Brazil, China, India, and Russia and No Countervailable Subsidization of Imports of Certain Cold-Rolled Steel Flat Products from Korea.

• On December 16, 2015, the Department of Commerce (Commerce) announced its affirmative preliminary determinations in the countervailing duty (CVD) investigations of imports of certain cold-rolled steel flat products from Brazil, China, India, and Russia and its negative preliminary determination in the CVD investigation of imports of certain cold-rolled steel flat products from Korea.

• The CVD law provides U.S. business and workers with a transparent and internationally accepted mechanism to seek relief from the market distorting effects caused by injurious subsidization of imports into the United States, establishing an opportunity to compete on a level playing field.

• For the purpose of CVD investigations, countervailable subsidies are financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods.

• In the Brazil investigation, Commerce preliminarily determined that mandatory respondents Companhia Siderurgica Nacional and Usinas Siderurgicas de Minas Gerais both received a subsidy rate of 7.42 percent. All other producers/exporters in Brazil have been assigned a preliminary subsidy rate of 7.42 percent.

• In the China investigation, Commerce preliminarily determined that mandatory respondents Angang Group Hong Kong Co., Ltd. and Benxi Iron and Steel (Group) Special Steel Co., Ltd. and, a non-cooperative exporter, Qian’an Golden Point Trading Co., Ltd., received subsidy rates of 227.29 percent. All other exporters of certain cold-rolled steel flat products from China will be subject to a subsidy rate of 227.29 percent. These CVD rates are based on adverse facts available following Commerce’s determination that the Government of the People’s Republic of China and the mandatory respondents did not fully cooperate in the investigation by failing to respond to Commerce’s requests for information.

• In the India investigation, Commerce preliminarily determined that sole mandatory respondent JSW Steel Limited and its cross-owned affiliate JSW Coated Products Limited received subsidy rate of 4.45 percent. All other producers/exporters in India have been assigned a preliminary subsidy rate of 4.45 percent.

• In the Korea investigation, Commerce preliminarily determined that mandatory respondents Hyundai Steel Co., Ltd. received a subsidy rate of 0.61 percent and POSCO/Daewoo International Corporation received a subsidy rate of 0.18 percent, which are both de minimis which results in a negative countervailing duty determination. Because the preliminary determination is negative, no “all others” rate has been applied to any other producers/exporters in Korea.
U.S. Department of Commerce | International Trade Administration

• In the Russia investigation, Commerce preliminarily determined that mandatory respondents Novolipetsk Steel OJSC (NLMK), Novex Trading, Altai-Koks OJSC, Dolomite OJSC, Stoilensky OJSC, Studenovskaya (Stagdok) OJSC, Trading House LLC, Vtorchermet NLMK LLC, Vtorchermet OJSC, and Vtorchermet NLMK Center LLC (collectively, the NLMK Companies) received a subsidy rate of 6.33 percent and PAO Severstal, Severstal Export GmbH, JSC Karelsky Okatysh, AO OLKON, AO Vorkutaugol, and JSC Vtorchermet (collectively, the Severstal Companies) received a subsidy rate of 0.01 percent, which is de minimis. The “all others” rate is the rate calculated for the NLMK Companies.

• As a result of the preliminary affirmative determinations for Brazil, China, India, and Russia, Commerce will instruct U.S. Customs and Border Protection to require cash deposits based on these preliminary rates. As a result of the negative preliminary determination, no cash deposit will be required for imports of certain cold-rolled steel flat products from Korea.

• Based on an allegation filed in the China CVD case, Commerce found that critical circumstances do not exist for all other Chinese exporters, but do exist for Angang Group Hong Kong Co., Ltd., Benxi Iron and Steel (Group) Special Steel Co., Ltd., and Qian’an Golden Point Trading Co., Ltd. Where critical circumstances are found, CBP will be instructed to impose provisional measures retroactively on entries of certain cold-rolled steel flat products up to 90 days prior to publication of the preliminary determination Federal Register notice.

• Based on an allegation filed in the Russian CVD case, Commerce found that critical circumstances do not exist with regard to Russian producer/exporters of cold-rolled steel. (End of Quoted Section)

The next important date for the cold rolled trade suits is February 24, 2016 when the US Department of Commerce is scheduled to release (subject to extension) their Preliminary Determination on the antidumping (AD) portion of the trade suits (above was countervailing duty portion only). The next step for the countervailing duty suit is for the Final Determinations from both the US Department of Commerce as well as the International Trade Commission (ITC). Those dates are listed in the table below.

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