Analysis
November 25, 2025
Alleged transshipment of Chinese steel plate raises red flags in Houston
Written by Laura Miller
A US-based steel importer is sounding the alarm over what it claims is a blatant case of duty circumvention involving more than 5,000 metric tons (mt) of hot-rolled plate. The material is reportedly being offered well below market prices, further raising suspicions.
According to the company, which has requested anonymity, the cargo in question was likely produced in China and routed through Malaysia. When it arrived at the Port of Houston on Sept. 30, it was declared to be of Malaysian origin, but a deeper investigation suggests otherwise. Circumvention tactics like this are allegedly done to avoid paying US import duties.
That’s the definition of transshipment, and it’s illegal, according to the US Tariff Act of 1930.
The shipment has triggered a formal e-allegation submission to US Customs and Border Protection (CBP).
The e-allegations program is CBP’s primary tool for reviewing, managing, and investigating reported trade violations submitted through the Trade Violations Reporting portal.
The portal accepts reports of suspected violations against anti-dumping and countervailing duties (AD/CVD), quotas, natural resources, merchandise, brokers, forced labor, and sanctions. Violations under the Enforce and Protect Act (EAPA) have stricter requirements and are also entered through the portal.
While CBP acknowledged receipt of the complaint via an automated response, the 44-day government shutdown that began on Oct. 1 delayed any official action in this investigation.
When pressed, a CBP spokesperson said the agency can’t legally disclose details of any allegation it receives. It does actively address trade violation allegations, they said, working to protect US industries and businesses from unfair trade practices.
Trader claims
The trading company says they’ve provided detailed documentation of the racket through its legal counsel, including photos, mill test certificates (MTCs), and a breakdown of discrepancies in origin markings.
The trader flagged many seeming irregularities in this particular circumvention scheme. We’ll discuss below the false origin claims, suspicious MTCs, and opaque corporate structuring.
Dubious mill test certificates (MTCs)
Initial certificates for the plate list “Shangang Steel Sdn Bhd” as the Malaysian producer. However, the MTCs lack the signatures and stamps required for a certificate to be valid.
Additionally, SMU could not verify the entity’s existence. Online searches did yield websites for two Chinese entities with similar names – Shangang Metal and Shangang Steel Group. Attempts to reach them were unsuccessful.
There’s only one plate producer in Malaysia
The only known Malaysian HR plate producer, Ji Kang Dimensi Sdn Bhd, is a reroller located on the country’s east coast. It has categorically denied that the plate in question is its material.
The company says mis-declaring imports could lead to inflated import figures and has the potential to tarnish its reputation. It is raising the matter with the Malaysian authorities.
Ji Kang affirmed it is the sole Malaysian producer of hot-rolled steel plate.
“We can confirm,” Ji Kang said in a statement sent to SMU, that any hot-rolled steel plate in widths of 60 to 96 inches, “purportedly of Malaysian origin that does not have our trademark stenciled on the plate surface, and/or is not supported by a test certificate issued by ourselves, is not produced by our company.”
The shipment that arrived in Houston on Sept. 30 “must therefore have been manufactured in another country, not in Malaysia,” Ji Kang declared.
Trade circumvention via corporate structuring
North America Wood appears in the documentation surrounding the disputed shipment, listed as the consignee and notify party, according to a Datamyne report cited by the complainant.
While the name suggests a lumber business, its involvement in the steel trade raises questions. Like whether the company could be being used as a front to obscure its true origin and ownership in circumvention schemes.
SMU found that, in March of this year, six months before the shipment arrived in Houston, North America Wood applied to do business as North America Metals Inc. in the state of Wyoming.
Attempts to reach the company by phone and email listed on its website were unsuccessful. The website claims North America Metals has been in business since 2013.
Also raising questions are the companies’ addresses. Both are listed as 30 N. Gould Street, Suite R, in Sheridan, Wy. The address is known for its use by numerous shell companies, according to various media reports and consumer complaints.
Stay vigilant
The company behind the plate complaint emphasizes that it “plays by the rules.” And it says it is concerned not just about financial harm but also about the broader implications for the industry.
“If somebody knowingly buys this material, they could be guilty by association,” the company warns.
The steel community is urged to be alert and carefully scrutinize origin documentation. SMU is told the shipment is still at the Port of Houston.
The paperwork for the imported HR plate in question states the material is from Shangang Steel Sdn Bhd in the city of Kemaman, state of Terengganu Darul Iman, Malaysia. Port Klang is shown as the shipment’s origin.
Enforcing trade laws is tricky
This case underscores the persistent challenges in enforcing trade laws and the importance of vigilance in a market where price anomalies and paperwork irregularities can signal deeper issues.
Trade attorney and SMU contributor Alan Price has long warned about China’s circumvention and transshipment tactics. He has noted activity through Vietnam involving hot-rolled, cold-rolled, and coated steel, as well as pipe and tube products.
Similarly, international trade lawyer and SMU contributor Lewis Leibowitz predicted additional circumvention cases two years ago. Pointing to solar products from Southeast Asia—including Malaysia—he cautioned that Chinese exporters would continue to exploit intermediary countries for transshipment.
US steel companies and trade associations have repeatedly condemned circumvention tactics. Representing firms across the supply chain, they continue to press Congress for stronger enforcement measures.
One bill of particular importance is the Leveling the Playing Field Act 2.0. It has been endorsed by many major US steel and manufacturing groups including the American Institute of Steel Construction (AISC), American Iron and Steel Institute (AISI), American Wire Producers Association (AWPA), Committee on Pipe and Tube Imports (CPTI), Steel Manufacturers Association (SMA), and US OCTG Manufacturers Association (USOMA), as well as the United Steelworkers (USW).
If enacted, the legislation would strengthen duty-evasion probes, accelerate cases against repeat offenders, and set firm deadlines for anti-circumvention inquiries. This would reduce delays that hinder relief for domestic players, according to AISI.
