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Steel Import Licenses Must Include Country of “Melt and Pour”

steel

Steel Import Licenses Must Include Country of “Melt and Pour”

The U.S. Department of Commerce’s (Commerce) Steel Import Monitoring and Analysis System (SIMA) will be modified effective October 13, 2020, to require that the country where the steel was “melted and poured” to be identified in the license application. Other changes in the final rule published on September 11, 2020, include adding coverage for eight additional HTS numbers in order to synchronize the system with the coverage of Section 232 for basic steel mill products; increasing the low-value license to $5,000, and allowing multiple uses; and extending the SIMA program indefinitely.

The new rule defines “melted and poured” as “the original location where the raw steel is: (A) First produced in a steel-making furnace in a liquid state; and then (B) Poured into its first solid shape…The first solid state can take the form of either a semi-finished product (slab, billets or ingots) or a finished steel mill product.”

The reporting requirement does not apply to raw materials used in steel manufacturing. The new required information on the country of “melt and pour” may also be useful in investigating circumvention of duties.

The SIMA website will shut down from October 9 until October 13, 2020 when the new website is updated and goes live. Commerce has created a page with the latest updates regarding SIMA. In the interim, Commerce stressed that there will be limited availability for manual license processing.

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Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. She practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.

tariffs

WTO Rules that U.S. Section 301 Tariffs on Chinese Imports Violate International Trade Rules

The World Trade Organization (WTO) dispute settlement body ruled that the tariffs imposed by the U.S. on imports from China are inconsistent with the General Agreement on Tariffs and Trade (GATT), and recommended that the U.S. “bring its measures into conformity” with its obligations under the GATT. Beginning in 2018, at the direction of President Trump, the U.S. imposed tariffs on $400 billion worth of imports from China over 4 different lists or tranches. The U.S. and China negotiated a “phase one” trade deal earlier this year, however, most of the tariffs were still left in place.

The WTO panel concluded that the U.S. failed to demonstrate that the tariff measures are justified under Article XX(a) of the GATT 1994.  As a result, the panel found the U.S. tariff measures to be inconsistent with Articles I:1, II:1(a) and II:1(b) of GATT 1994. In other words, the WTO found that the U.S. tariffs on China were discriminatory and excessive, and the U.S. failed to present justification for an exemption that could have legally allowed for the tariffs.

Despite the WTO’s recommendation, its ruling is highly unlikely to sway the course of U.S. trade policy. This is not only because of the limited authority of the WTO, but also because the administration has argued that the tariffs are justified under U.S. law. Section 301 of the Trade Act of 1974 provides the U.S. government with the authority to impose trade sanctions on countries that violate trade agreements or engage in unfair trade practices, of which the U.S. has frequently accused China.

The WTO’s ruling is likely to increase the current U.S. administration’s distrust of the WTO. U.S. Trade Representative Robert Lighthizer criticized the ruling, saying “the United States must be allowed to defend itself against unfair trade practices…” and that “[the WTO’s] decision shows that the WTO provides no remedy for such misconduct” by China.

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Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. She practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.

steel

Commerce Finds Dumping and Countervailable Subsidization of Imports of Carbon and Alloy Steel Threaded Rod from China and India

On February 10, 2020, the Department of Commerce (“Commerce”) announced its affirmative final determinations in the AD and CVD investigations of imports of carbon and alloy steel threaded rod from China and India. See the fact sheet for a summary of the final cash deposit rates and margins.

In the China AD investigation, Commerce calculated cash deposit rates of 4.26% and 14.16% to the mandatory respondents Zhejiang Junyue Standard Part Co., Ltd. and Ningbo Zhongjiang High Strength Bolts Co., Ltd., respectively. Chinese companies that are eligible for a separate rate received a rate of 11.47%. The antidumping cash deposit rate for all other Chinese companies is 59.45%.

In the China CVD investigation, Commerce calculated and assigned subsidy rates of 66.81% and 31.02% to the mandatory respondents Zhejiang Junyue Standard Part Co., Ltd. and Ningbo Zhongjiang High Strength Bolts Co., Ltd., respectively. The subsidy rate for all other Chinese exporters is 41.17%.

In the India AD investigation, Commerce assigned a cash deposit rate of 28.34% to mandatory respondent Daksh Fasteners and 2.47% for mandatory respondent Mangal Steel Enterprises Limited. The cash deposit rate for all other Indian exporters is 2.47%.

In the India CVD investigation, Commerce assigned a cash deposit rate of 211.72% to mandatory respondent Daksh Fasteners and a rate of 6.07% to mandatory respondent Mangal Steel Enterprises Limited. The cash deposit rate for all other Indian exporters is 6.07%.

The ITC is currently scheduled to make its final determinations on or about March 23, 2020. If the ITC makes affirmative final determinations of material injury to domestic industry, then Commerce will issue AD and CVD orders instructing Customs and Border Protection (“CBP”) to collect deposits based on the applicable duty rate. If the ITC makes negative determinations of injury, then the investigations will be terminated.

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Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. Shee practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.

Camron Greer is an assistant trade analyst in Husch Blackwell LLP’s Washington, D.C. office.