The gKNi World Trade Indicator powered by LogIndex—the data company of Kuehne + Nagel Group—stood at 139.7 at the end of August, a 1.3-percent drop compared to the previous month. The index is up 7.5 percent year over year. The drop in August is the largest monthly contraction reported in 2018.

The prospect of escalating trade wars has been weighing on investors, as recent data from Bank of America has shown that pressures on the institutions of global trade are viewed as the biggest risk for the world economy.

While most advanced economies are experiencing steady growth, Japan and emerging markets have lost considerable momentum. This trend will continue in September according to LogIndex forecasts. Foreign trade will reach negative territory year over year in South Korea, Taiwan, and Japan. Exports are expected to fall strongly in South Korea (-11.8 percent), Japan (-10.2 percent), India (-9.8 percent), Taiwan (-8.0 percent), and Brazil (-4.8 percent). Chinese exports growth year over year is expected to slow down from +12.2 percent in July to +7.0 percent in August. LogIndex sees this trend continuing through September.

This trend is in line with the latest manufacturing output forecasts: In September, the global industrial production will reach the lowest monthly increase since July 2015, according to LogIndex AG. The gKNi World Industrial Production (WIP) provides a real-time assessment of the activity in the manufacturing and mining sector around the globe. The seasonally and inflation-adjusted indicator is expressed in month over month percentage changes.

Manufacturers in Dickson County, Tennessee, recently sent a letter to President Donald Trump detailing their opposition to the president’s Section 232 steel tariffs. The tariffs were first imposed on steel imports in April on the grounds that the shipments pose a national security threat to the United States.

Following are excerpts from the letter:

“Today, our companies are facing a rapid increase in steel costs that threatens our ability to compete. All steel prices, whether produced domestically or imported, are the highest they have been since 2008 and 43 percent higher than this time last year. Domestic steel prices are 68 percent higher than the average world export price and 88 percent higher than steel costs in China.

“We find it difficult to pass on these cost increases either due to contractual obligations or competitive pressures. Even where we can pass on price increases, we face the clear long-term risk of losing market share to lower priced foreign competition, who do not face government-imposed import restrictions which artificially drive up steel costs. Foreign competitors have strategic material cost advantages and their manufactured products freely flow into the US with little or no tariffs.

“All of us source our steel from domestic steel mills and share your interest in maintaining a strong steel industry. Fortunately, the US steel mills are financially quite strong. In 2017, before the tariffs went into effect, the US steel industries had their best financial year since 2008. Moreover, their earnings in 2018 far exceed last year.

“Unfortunately, companies like ours that consume steel are facing significant headwinds. The 25-percent tariffs are effective in reducing the flow of raw steel crossing our boarders into the US, but result in the importation of steel components and finished goods in their stead. This not only will negatively impact our companies, but also US consumers who will be faced with higher prices. Ultimately, the domestic steel mills will feel the consequences as their customer base shrink.”

The US Department of Commerce has announced the affirmative final determinations in the antidumping duty (AD) and countervailing duty (CVD) investigations of imports of stainless steel flanges from India.

Commerce determined that exporters from India have sold stainless steel flanges in the United States at 19.16 to 145.25 percent less than fair value. Commerce also determined that India is providing countervailable subsidies to its producers of stainless steel flanges at rates ranging from 4.92 to 256.16 percent.

In 2017, imports of stainless steel flanges from India were valued at an estimated $44 million.

The petitioners in the case were the Coalition of American Flange Producers and its individual members: Core Pipe Products, Inc. of Carol Stream, Illinois and Maass Flange Corporation of Houston, Texas.

Antidumping duty and countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of the unfair pricing of imports into the United States. Commerce currently maintains 456 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade.

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. Since the beginning of the current Administration, Commerce has initiated 120 new AD and CVD investigations, a 216 percent increase from the comparable period in the previous administration.

The US International Trade Commission (ITC) is currently scheduled to make its final injury determinations on September 24, 2018.  If the ITC makes affirmative final injury determinations, Commerce will issue AD and CVD orders.  If the ITC makes negative final determinations of injury, the investigations will be terminated and no orders will be issued.

The US Department of Commerce announced the affirmative preliminary determinations in the countervailing duty (CVD) investigations of imports of large diameter welded pipe from China, India, Korea, and Turkey. Commerce’s investigation found that exporters in those countries received countervailable subsidies at the following rates: China – 198.49 percent; India – 541.15 percent; Korea – 0.01 to 3.31 percent; and Turkey – 1.08 to 3.76 percent.

Imports from companies that receive unfair subsidies from their governments in the form of grants, loans, equity infusions, tax breaks, and production inputs are subject to countervailing duties aimed at directly countering those subsidies.

Commerce instructed US Customs and Border Protection to collect cash deposits from importers of large diameter welded pipe from China, India, Korea, and Turkey based on all preliminary rates that are above de minimis.

In 2017, imports of large diameter welded pipe from China, India, Korea, and Turkey were valued at an estimated $29.2 million, $294.7 million, $150.9 million, and $57.3 million, respectively.

The petitioners in the case were American Cast Iron Pipe Company of Birmingham, Alabama; Berg Steel Pipe Corp., Panama City, Florida; Berg Spiral Pipe Corp., Mobile, Alabama; Dura-Bond Industries, Steelton, Pennsylvania; Greens Bayou Pipe Mill, Houston, Texas; JSW Steel (USA), Baytown, Texas; Skyline Steel, Parsippany, New Jersey; Stupp Corporation, Baton Rouge, Louisiana; and Trinity Products, Fallon, Missouri.

Countervailing duty laws provide US businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of unfair subsidization of imports into the United States.  Commerce currently maintains 449 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade. Commerce is currently scheduled to announce its final CVD determinations on or about November 6, 2018.

Since the beginning of the current Administration, Commerce has initiated 118 new antidumping and countervailing duty investigations.

The US International Trade Commission (ITC) is currently scheduled to make its final injury determinations on December 20, 2018.  If Commerce makes affirmative final determinations and the ITC makes affirmative final injury determinations, Commerce will issue CVD orders.  If Commerce makes negative final determinations or the ITC makes negative final determinations of injury, the investigations will be terminated and no orders will be issued.

The United States Department of Commerce has announced the affirmative preliminary determination in the countervailing duty (CVD) investigation of imports of rubber bands from China. The investigation found that exporters received countervailable subsidies of 125.77 percent.

The department also announced a negative preliminary determination in the CVD investigation of imports of rubber bands from Thailand, finding that exporters received de minimis subsidies of 0.23 and 0.37 percent.

Commerce will instruct US Customs and Border Protection (CBP) to collect cash deposits from importers of rubber bands from China based on these preliminary rates.  Because the subsidy rates calculated in the Thailand investigation are de minimis, Commerce will not instruct CBP to require cash deposits from importers of rubber bands from Thailand.

In 2017, imports of rubber bands from China and Thailand were valued at an estimated $4.9 million and $12.1 million, respectively. The petitioner in the cases was Alliance Rubber Company of Arkansas.

Countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of the unfair subsidization of imports into the United States.  Imports from companies that receive unfair subsidies from their governments in the form of grants, loans, equity infusions, tax breaks and production inputs are subject to countervailing duties aimed at directly countering those subsidies. Since the beginning of the current administration, Commerce has initiated 118 new antidumping (AD) and CVD investigations, 30 percent more than the 91 initiations in the last 529 days of the previous administration. Commerce currently maintains 448 AD and CVD orders which provide relief to American companies and industries impacted by unfair trade.

Commerce is currently scheduled to issue its final CVD determinations on or about November 13, 2018. If Commerce makes affirmative final determinations, the US International Trade Commission (ITC) will be scheduled to make its final injury determinations on or about December 28, 2018.  If Commerce makes affirmative final determinations in these investigations and the ITC makes affirmative final injury determinations, Commerce will issue CVD orders.  If Commerce makes negative final determinations or the ITC makes negative final determinations of injury, the investigations will be terminated and no orders will be issued.