US Secretary of Commerce Wilbur Ross has announced the initiation of new antidumping duty (AD) and countervailing duty (CVD) investigations to determine whether steel racks from China are being dumped in the United States and to determine if producers in China are receiving unfair subsidies.

The investigations were initiated based on petitions filed by the Coalition for Fair Rack Imports, the members of which are eight companies from West Virginia, California, Pennsylvania, North Carolina, Minnesota, Wisconsin, Virginia, and Tennessee. The petitioner estimates that imports of steel racks in 2017 were valued at approximately $200 million.

In the AD investigation, Commerce will determine whether imports of steel racks from China are being dumped in the US market at less than fair value. The alleged dumping margins range from 130.0 to 144.5 percent.

In the CVD investigation, Commerce will determine whether Chinese producers of steel racks are receiving unfair government subsidies. There are 28 subsidy programs alleged, including five preferential loan and interest rate programs, one debt-to-equity swap program, six income tax and other direct subsidy programs, two indirect tax programs, seven less than adequate remuneration (LTAR) programs, as well as seven grant programs.

Foreign companies that price their products in the US market below the cost of production or below prices in their home markets are subject to antidumping duties.  Foreign companies that receive financial assistance from foreign governments that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods, are subject to countervailing duties.

If Commerce makes affirmative findings in these investigations, and if the US International Trade Commission (ITC) determines that dumped and/or unfairly subsidized US imports of steel racks from China are causing injury to the US industry, Commerce will impose duties on those imports in the amount of dumping and/or unfair subsidization found to exist.

Antidumping and countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of dumping unfairly priced and unfairly subsidized imports into the United States.  Commerce currently maintains 448 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade.

During Commerce’s investigations into whether steel racks from China are being dumped and/or unfairly subsidized, the ITC will conduct its own investigations into whether the US industry and its workforce are being harmed by such imports.  The ITC will make its preliminary determinations on or before August 6, 2018.  If the ITC preliminarily determines that there is injury or threat of injury, then Commerce’s investigations will continue, with the preliminary CVD determination scheduled for September 13, 2018, and preliminary AD determination scheduled for November 27, 2018.

If Commerce preliminarily determines that dumping and/or unfair subsidization is occurring, then it will instruct US Customs and Border Protection to start collecting cash deposits from all US companies importing steel racks from China.

Final determinations by Commerce in these cases are scheduled for November 27, 2018, for the CVD investigation, and February 11, 2019, for the AD investigation, but those dates may be extended.  If Commerce finds that products are not being dumped and/or unfairly subsidized, or the ITC finds in its final determinations there is no harm to the US industry, then the investigations will be terminated and no duties will be applied.