AD/CVD cases

Earlier this week we summarized the new antidumping (AD) and countervailing duty (CVD) petitions against Twist Ties from China.  But also that same week there were four additional sets of new United States AD/CVD petitions filed against the following:

  • Phosphate Fertilizers from Morocco and Russia (filed 6/26/20)
  • Silicon Metal from Bosnia and Herzegovina, Iceland, Kazakhstan, and Malaysia (filed 6/30/20)
  • Standard Steel Wire Mesh from Mexico (filed 6/30/20)
  • Seamless Refined Copper Pipe and Tube from Vietnam (filed 6/30/20)

Though none of these cases target China specifically, they all have some China angle as to what is happening in the affected industries or why these new cases were filed.  Below, we will discuss these Chinese connections and provide links to the proposed scope definition, list of exporters, and list of U.S. importers identified in each petition.

Phosphate Fertilizers from Morocco and Russia

The Mosaic Company filed this CVD petition targeting three companies, OCP, S.A. of Morocco and PhosAgro and Eurochem of Russia and alleged them for causing an unprecedented surge of low-priced imports that were heavily subsidized by the Moroccan and Russian governments.  Mosaic blames these imports for loss of market share, plummeting prices, declines in profitability and plant closures.

Mosaic as a publicly traded company, however, has stock analysts who have more prominently discussed how its recent performance were adversely affected by the prolonged U.S.-China trade war, the coronavirus, and unfavorable weather patterns that caused a delayed planting season which affected fertilizer volumes and prices through 2019 into 2020. China has been one of Mosaic’s most important markets, but between U.S. and China throwing tariffs at each other and the coronavirus shutting down China, demand for Mosaic’s fertilizer in China dropped sharply.  China has begun to lift some coronavirus restrictions and has started to resume economic activity. The U.S.-China Phase 1 deal, also provides further hope that the Chinese demand for fertilizer will resume. But neither the continued containment of coronavirus nor the continued viability of the Phase 1 deal are far from certain.

Scope – See here for the proposed scope definition from the petition.

Named Exporters/ Producers – See attached list here for a list of companies that Petitioner believes are producers and exporters of the subject merchandise.

Named U.S. Importers – See attached list here for a list of companies that Petitioner believes are U.S. importers of the subject merchandise.

 

Silicon Metal from Bosnia and Herzegovina, Iceland, Kazakhstan, and Malaysia

There have been five prior sets of AD/CVD proceedings against imported silicon metal, going back to 1978 when the first case was filed against Canada. The second wave of cases targeted silicon metal from China, Argentina and Brazil that resulted in AD orders issued in 1991.  Only the AD order on China still remains in effect out of this first batch.

The domestic industry then successfully targeted silicon metal imports from Russia in 2003.  A petition was filed against Brazil and South Africa in 2004, but then withdrawn.  Before filing this case, the same petitioner, Globe Specialty Metals (GSM), most recently filed a case in 2017 that targeted silicon metal from Australia, Brazil, Norway and Kazakhstan, but the ITC found that there was no injury caused by the subject imports.

Petitioner GSM is a serial user of the US trade laws that has repeatedly tried to stop the latest wave of silicon metal imports.  Even if AD/CVD duties are imposed, the US silicon metal market has always adjusted and found new import sources that could meet the demand that the US producers clearly could not satisfy. It’s gotten to the point that the domestic industry now has to target imports from countries such as Bosnia Herzegovina and Iceland that previously have never been the target of a US AD case.

Scope – See here for the proposed scope definition from the petition.

Named Exporters/ Producers – See attached list here for a list of companies that Petitioner believes are producers and exporters of the subject merchandise.

Named U.S. Importers – See attached list here for a list of companies that Petitioner believes are U.S. importers of the subject merchandise.

 

Standard Steel Wire Mesh from Mexico

Mexico is by far the biggest import source of wire mesh with Mexico accounting for over 40,000 short tons out of the total imports from all countries of 62,000 short tons in 2019.  China along with Canada were the next largest import sources, but only with about 8,000 short tons. Although this case may result in Mexican steel wire mesh imports being reduced, it appears unlikely that China will be able to step in as a replacement import source, as Chinese steel wire mesh are subject to Section 301 China tariffs.

Steel wire mesh is made from steel wire which was among the steel products covered by the Section 232 national emergency tariffs that President Trump imposed on steel and aluminum imports from most countries. US companies that were downstream consumers of steel products, such as the US steel wire mesh producers, likely were harmed by these Section 232 tariffs with reduced supply and/or increased prices, making it much harder for them to compete against steel wire mesh imports that did not have to deal with any Section 232 tariff costs.

Scope – See here for the proposed scope definition from the petition.

Named Exporters/ Producers – See attached list here for a list of companies that Petitioner believes are producers and exporters of the subject merchandise.

Named U.S. Importers – See attached list here for a list of companies that Petitioner believes are U.S. importers of the subject merchandise.

 

Seamless Refined Copper Pipe and Tube from Vietnam

This new case appears to target Vietnamese companies that were set up after the AD order was imposed on seamless refined copper pipe and tube from China in 2010.  The petition specifically notes that several of the Vietnamese producers had shifted production from China to Vietnam and now were shipping significant volumes that were depressing prices and injuring the domestic industry.  It is somewhat unusual that the sequel case took so long (ten years) to be filed, as usually the shift from Chinese producers moving to Vietnam results in a spike in US imports from Vietnam that triggers a new petition within a few years of the Chinese AD order.  The story line from this sequel case against Vietnam will likely be similar to that of the original case against China, but it will be interesting to see what kind of differences develop in this case.

Scope – See here for the proposed scope definition from the petition.

Named Exporters/ Producers – See attached list here for a list of companies that Petitioner believes are producers and exporters of the subject merchandise.

Named U.S. Importers – See attached list here for a list of companies that Petitioner believes are U.S. importers of the subject merchandise.

 

These cases will play out over the next year before two U.S. agencies, the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”).  The ITC will collect testimony and data from U.S. producers, foreign producers/ exporters, U.S. importers, and U.S. purchasers to determine if a domestic industry is injured by reason of the subject imports.  The DOC will focus primarily on the foreign exporters/ producers in their investigation of whether the named subject imports are being sold to the United States at less than fair value (“dumping”) or benefit from unfair government subsidies, and determine the amount of AD/CVD duties to impose.

 

Estimated Schedule of Investigations.

June 30, 2020 – Petitions filed

July 20, 2020 – DOC initiates investigation

July 21, 2020 – ITC Staff Conference

August 14, 2020 – ITC preliminary determination

November 27, 2020 – DOC CVD preliminary determination (assuming extended deadline) (9/23/20 – unextended)

January 26, 2021 – DOC AD preliminary determination (assuming extended deadline) (12/7/20 – unextended)

June 10, 2021 – DOC final determination (extended and AD/CVD aligned)

July 25, 2021 – ITC final determination (extended)

August 1, 2021 – DOC AD/CVD orders issued (extended)