For many years, antidumping (AD) and countervailing duty (CVD) cases have provided legal means for domestic industries in many countries to obtain protection against low-priced and subsidised import competition. Although the annual number of US cases and the range of industries bringing actions have decreased significantly over the past decade, several metals and metal products industries continue to rely on these actions as a means of combating imports.

Companies in these industries—US producers, US importers, overseas producers and exporters to the US market alike—should be familiar with this form of legal proceeding and consider its implications when developing their global business strategies.

US AD and CVD Laws and Practices

The US AD and CVD laws are designed to counteract the impact of dumped and subsidised imports on domestic industries. For petitioners seeking relief under these laws, a successful result from an investigation is the imposition of an order that requires the deposit and eventual assessment of AD and/or CVD duties on entries of the imports in amounts sufficient to offset the dumping or subsidisation.

Affirmative AD and CVD determinations are based on historic periods, e.g., the year preceding the petition, and apply as duty deposit requirements paid by importers on future entries. Each subsequent year, during the “anniversary month” of the order, interested parties may request

an administrative review of the entries made during the past year so that the actual dumping margins and/or rates of subsidisation may be determined and assessed. If no review is requested, duties are assessed at the deposit rates.

Dumping occurs when an exporter sells a product or products in a country at prices that are less than “normal value,” and those imports cause or threaten to cause material injury to the domestic industry. In the United States, the US Department of Commerce (DOC) determines if the imports have been dumped, and the US International Trade Commission (ITC) determines whether or not the subject imports are a cause of material injury or threat to the domestic industry. 

US law establishes normal value as the price at which the products, or similar products, are sold in the exporter’s home market. If there are too few home market sales, normal value is established by the price at which the product is sold in third countries. If home market and third-country prices cannot be determined, or if those prices are below the cost of production, normal value is established by a “constructed value,” computed as the cost of producing the product plus statutory minimum additions for overhead and profit. 

The DOC compares prices and costs by making various adjustments, e.g., for movement charges, circumstances of sales and exchange rate fluctuations, to arrive at net, ex-factory prices. The amount by which the exporter’s US price falls below normal value is the “dumping margin.” 

The DOC is also responsible for determining whether subsidies are “countervailable,” i.e., subject to countervailing duties. Countervailable subsidies typically consist of export subsidies or certain domestic subsidies. Subsidies are generally benefits conveyed directly or indirectly by a national, local or regional governmental authority. Under US law, domestic subsidies are benefits conferred on the subject products but are not dependent on their exportation. In order to be countervailable, domestic subsidies must not be generally available; they must be limited to specific companies or sectors.

Countervailable subsidies also include certain “upstream subsidies,” i.e., benefits provided by a government entity relating to an input used in the production of the subject merchandise. To be countervailable under US law, an upstream subsidy must convey a competitive benefit on the subject products and must have a significant effect on the cost of producing those end products. The DOC measures each countervailable subsidy against the sales to which it applies, e.g., all sales or export sales only, then computes a subsidy rate for each program and combines them into an overall subsidy rate to apply as a countervailing duty on future entries of the subject products.

AD and CVD Orders on Steel, Metals and Metal Products

Of the 67 US AD and/or CVD cases filed since the beginning of 2008, 36 (54 per cent) involve metals (principally steel) or metal products. Metals industry actions similarly represent a large share of all AD/CVD cases that have resulted in the imposition of US import relief measures. There are currently 151 active US AD and/or CVD orders on metals and metal products (petitioners often bring combined AD/CVD cases against multiple countries). The following list, based on subcategories used by the ITC, illustrates the volume and breadth of cases involving metals and metal products:

• Iron and Steel—Mill Products: 57 active orders, including clad steel plate, steel concrete rebar, hot-rolled carbon steel flat products, carbon and stainless steel wire rod, carbon steel plate, stainless steel sheet and strip, tin mill products, stainless steel bar, steel threaded rod and steel wire garment hangers

• Iron and Steel—Other Products and Castings: 36 active orders, including pre-stressed concrete steel wire strand, iron construction castings, various types of pipe fittings, ball bearings, tapered roller bearings, steel nails, steel wire garment hangers, pre-stressed concrete steel wire strand, steel grating, high-pressure steel cylinders, utility scale wind towers and drawn stainless steel sinks

• Iron and Steel—Pipe Products: 34 active orders, including various types of line pipe, seamless pipe, pressure pipe and carbon, stainless and non-alloy steel pipe; drill pipe and drill collars; light- walled rectangular tube; light-walled rectangular pipe; and tube and oil country tubular goods

• Metals and Minerals: 24 active orders, including uranium, silicomanganese, silicon metal, ferrovanadium; magnesium, pure magnesium (ingot), gray portland cement and clinker, brass sheet and strip, foundry coke, pure granular magnesium; electrolytic manganese dioxide; and aluminium extrusions

The countries concerning which there are active AD/CVD orders and the number of orders covering each country in descending order are: China (45), Japan (13), India (10), Korea (10), Taiwan (9), Brazil (8), Indonesia (6), Ukraine (5), Thailand (5), Mexico (4), Russia (4), Italy (3), Turkey (3), South Africa (3), Vietnam (3), Germany (2), France (2), Spain (2), Moldova (2), Australia, Belarus, Belgium, Canada, Kazakhstan, Latvia, Malaysia, Philippines, Poland, Romania, Trinidad and Tobago, the United Arab Emirates, the United Kingdom and Venezuela (1 each). 

The US metals and metal products industries represent a majority share of all US AD/ CVD petitioners and consequently derive a level of protection under these laws against competition from imports that is greater than all other US industries combined. The range of metals products and the countries of origin that are the targets of AD/CVD cases in the United States is vast, covering billions of dollars in trade. While normal tariffs have decreased over recent decades, and other non-tariff barriers have been eliminated, including through many bilateral and multilateral free trade agreements, AD/CVD relief clearly remains the primary option for the US metals and metal products industries seeking to maintain and gain new protection against competitive imports into the domestic market.