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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.

aluminum

U.S. Re-Imposes 10% Tariff on Specific Aluminum Imports from Canada

On August 6, 2020, the White House issued a proclamation stating that the U.S. would re-impose 10% tariffs on imports of non-alloyed unwrought aluminum under subheading 7601.10 from Canada starting August 16, 2020.  The subject products make up the majority of U.S. aluminum imports from Canada.

President Donald Trump explained that the re-imposition of tariffs was necessary in his view, stating that:

“Canada is the largest source of United States imports of non-alloyed unwrought aluminum, accounting for nearly two-thirds of total imports of these articles from all countries in 2019 and approximately 75 percent of total imports in the first five months of 2020. The surges in imports of these articles from Canada coincides with a decrease in imports of these articles from other countries and threatens to harm domestic aluminum production and capacity utilization.”

The proclamation went on to state that “the United States will monitor for import surges of articles that continue to be exempt from the tariff proclaimed in Proclamation 9704, to ensure that exports of non-alloyed unwrought aluminum to the United States are not simply reoriented into increased exports of alloyed, further processed, or wrought aluminum articles,” the proclamation said, meaning that tariffs on additional aluminum articles could follow in the future. Additionally, under the previous agreement between the two countries, Canada is allowed to place retaliatory tariffs on U.S. aluminum products.

The White House has not stated whether or not it will reinstate the 25% tariffs on imports of steel.

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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.

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

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

section 232

Commerce to Investigate Expansion of Section 232 Tariffs on Steel to Include Imports of Electrical Transformer Steel

On Monday May 4, 2020, the Department of Commerce issued a news release announcing the start of a Section 232 investigation on imports of “Laminations and Wound Cores for Incorporation Into Transformers, Electrical Transformers, and Transformer Regulators.” This investigation is effectively an examination of whether or not to expand the current Section 232 tariffs on steel to include these products.

The announcement indicates that imports of the steel incorporated into the specifically identified transformers “are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.” According to Commerce, it had received “inquiries and requests from multiple members of Congress as well as industry stakeholders,” to start this investigation. Similar to other 232 investigations, the Bureau of Industry and Security will conduct the investigation and request comments in a Federal Register notice that will likely be published soon.

Quoting Commerce’s press release – “transformers are part of the U.S. energy infrastructure,” and “laminations and cores made of grain-oriented electrical steel are critical transformer components. Electrical steel is necessary for power distribution transformers for all types of energy—including solar, nuclear, wind, coal, and natural gas—across the country. An assured domestic supply of these products enables the United States to respond to large power disruptions affecting civilian populations, critical infrastructure, and U.S. defense industrial production capabilities.” It is also important to note that grain-oriented electrical steel (“GOES”) was subject to antidumping duties and countervailing duty orders for several years but there are no current antidumping and countervailing duty orders on GOES.

Based upon the proposed schedule, the secretary of Commerce will notify the secretary of Defense of the investigation, as required by statute. In addition, it stated that the “Department of Commerce will conduct a thorough, fair, and transparent review to determine the effects on the national security from imports of laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators.”

In January 2020, Commerce expanded the scope of the Section 232 tariffs on Steel and Aluminum to include certain other derivative products on products such as nails and thumbtacks without conducting an investigation such as the one now seemingly being proposed. The trade remedies team at Husch Blackwell LLP represents clients now challenging that expansion in the U.S. Court of International Trade. In initiating this new investigation, it appears that Commerce has recognized that it may be on shaky ground for its earlier expansion of section 232 tariffs on steel and aluminum and may be willing to provide a fuller procedure for comments and input from interested parties.

Regardless of the procedures, however, if affected U.S. companies cannot locate the steel they need domestically, and the tariffs make importation of steel to manufacture downstream products, then the only option is to source from other countries. Thus, we expect that numerous companies will file comments on this new round of expansion of national security tariffs.

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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.

Jeffrey Neeley is a Washington-based partner with the law firm Husch Blackwell LLP. He leads the firm’s International Trade Remedies team.

Steel Makers Unite to Appeal ITC Import Decision

Washington, DC – US producers of grain-oriented electrical steel (GOES) have said they will file an appeal of the negative decision on “material injury” by the US International Trade Commission (ITC).

The AK Steel Corp., ATI Flat Rolled Producers, and the United Steelworkers Union, which represents workers engaged in the production of GOES at ATI Flat Rolled, will join forces to fight the ITC’s decision.

The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, which represents workers engaged in the production of GOES at AK Steel Corporation, also expressed its support for the appeal.

GOES is a flat-rolled alloy, specialty steel product that’s used primarily in the production of laminated cores for large and medium-sized electrical power transformers and distribution transformers.

The petitions cover GOES in either sheet or strip form, in coils or in straight lengths imported from the Czech Republic, China, South Korea, and Russia.

“We are very disappointed by the negative determination by the ITC,” said David A. Hartquist of Kelley, Drye & Warren LLP, the Washington, DC-based counsel to petitioners.

“We believe the case warranted an affirmative determination and that the majority decision contains fundamental errors of fact and law,” he said.

The Department of Commerce, he said, “found antidumping margins of up to 159 percent, which caused lost sales and significant financial injury to the US producers, which in our judgment met the legal standard for an affirmative determination.”

The petitioners also filed an appeal on September 16, 2014 to a similar ITC decision covering imports from Germany, Japan and Poland.

10/24/2014

 

Houston Handles Record Steel Shipments

Houston, TX – The Port of Houston handled more steel shipments in July than in any month since 2008 as 844,000 tons of the product were handled at the port, according to Executive Director Roger Guenther.

Addressing the most recent meeting of the Port Commission of the Port of Houston Authority (PHA), Guenther also noted that the port had achieved a record with operating revenues in July 2014 of more than $24 million.

Steel and bulk cargo grew by “a solid 5 percent” in July, he said, adding that more than 22 million tons of cargo moved across PHA docks during the first seven months of the year.

Container volume was relatively flat compared to last year, but recorded a four percent increase in the number of loaded boxes year to date.

This was offset, Guenther said, “by a reduced number of empty containers being imported through PHA terminals due to an increase in loaded imports.”

Combining the strength in revenues and controlled spending, PHA has generated more than $65 million in operating cash flow for the year, a growth of 5 percent, he reported.

Following the first two quarters of 2014, the PHA said that it’s prepared a “re-forecast budget” for the remainder of the year, reflecting a $5.8 million increase in annual operating revenue, a decrease of $2.1 million in annual operating expense.

“This revenue generated will be reinvested in the infrastructure assets needed to increase capacity and provide for increased economic activity and job growth for the region,” said Guenther.

09/11/2014

USITC Rules on ‘Oil Country Tubular Goods’ Imports

Washington, DC –The US International Trade Commission (USITC) has determined that “a US industry is materially injured or threatened with material injury” by the import of certain oil country tubular goods (OCTG) from six countries.

The ruling on OCTG from India, Korea, Taiwan, Turkey, Ukraine, and Vietnam gives the US Department of Commerce the go-ahead to impose tariffs as high as 118 percent on the affected OCTG imports.

The determination does not impact imports of the product from the Philippines and Thailand.

OCTG imports from Saudi Arabia were dropped from the earlier complaint, which was brought in 2013 by US steel companies after imports of the pipes used in the oil and gas industry surged and foreign manufacturers sought to cash in on booming US shale gas drilling.

Seventeen US companies including United States Steel; Maverick Tube Corporation; Boomerang Tube; Energex Tube; Northwest Pipe Co.; Welded Tube, USA; and Tejas Tubular Products filed the original complaint.

The US used 7 million tons of OCTG, valued at $10.1 billion in 2013, accounting for nearly two-thirds of the US market, according to the American Iron and Steel Institute in Washington, DC.

Leading sources of OCTG last year were Korea, Canada, Argentina, Japan, Mexico, and Germany, the trade group said.

Foreign manufacturers responded to the determination saying countered that they do not supply enough pipe to threaten the US industry, and instead blamed the lower prices on US producers increasing supply.

09/02/2014