The Commerce Department announced on June 2, 2020, that it is starting another Section 232 investigation that could result in the imposition of tariffs or potentially other restrictions on imports of vanadium. The agency stated that it will review and determine “whether the present quantities or circumstances of vanadium imports into the United States threaten to impair the national security.”
Vanadium is a chemical element with the symbol “V” and is assigned atomic number 23. A general description of it is a hard, silvery-grey, malleable transition metal. It is an artificially isolated element, which is rarely found in its natural state, but one of its key properties once isolated artificially is to prevent oxidation. Various applications that rely on vanadium include use in the production of ferrovanadium, which is a steel additive. The chemical properties of vanadium also increase the strength of the steel and it is therefore used in products such as high-carbon steel alloys and high-speed tool steels for use “aircraft, jet engines, ballistic missiles, energy storage, bridges, buildings, and pipelines. Vanadium is a key component in aerospace applications due to its strength-to-weight ratio, the best of any engineered material,” Commerce said and “U.S. demand is supplied entirely through imports.”
This new 232 investigation is the result of the filing of a request by two domestic U.S. vanadium producers, AMG Vanadium and U.S. Vanadium, in November 2019. The allegation claims that the “domestic industry is adversely impacted by unfairly traded low-priced imports, limited export markets due to value-added tax regimes in other vanadium producing countries, and the distortionary effect of Chinese and Russian industrial policies,” according to Commerce’s press release.
The notice of initiation, of the 232 investigation was published in the Federal Register on June 3rd. Comments must be filed by July 20, 2020, and any rebuttal comments are due by August 17, 2020. Those interested in submitting comments should ensure that it addresses the following:
-the quantity of imports,
-domestic production and capacity needed to meet national defense requirements, and
-the impact of foreign competition on the vanadium industry, among other things.
Husch Blackwell continues to monitor the Section 232 investigations and will provide further updates as more information becomes available.
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.
Turner Kim is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.