From USTR:
China’s Imposition of Antidumping Duties and Countervailing Duties on U.S. Steel Imports
Grain-oriented flat-rolled electrical steel (GOES) is used by the power-generating industry in transformers, reactors, and other large electric machines. The two largest U.S. manufacturers of GOES are AK Steel Corporation, based in Ohio, and Allegheny Ludlum, based in Pennsylvania.
WTO rules permit Members to impose duties on imports of merchandise found to be sold at less than fair value – “dumped” – or subsidized, if those imports cause injury to the domestic industry. But, WTO rules also require Members to follow specific procedures and apply defined legal standards when they investigate these cases.
On June 9, 2009, China’s Ministry of Commerce (MOFCOM) initiated two investigations on grain-oriented flat-rolled electrical steel from the United States. On April 10, 2010, MOFCOM imposed antidumping duties and countervailing duties, saying American steel had been dumped into their market and subsidized.
China’s antidumping and subsidy determinations in the GOES investigations appear to violate numerous WTO requirements. In the United States’ view, China initiated both investigations without sufficient evidence; failed to objectively examine the evidence; failed to disclose “essential facts” underlying its conclusions; failed to provide an adequate explanation of its calculations and legal conclusions; improperly used investigative procedures; failed to provide confidential summaries of Chinese submissions; and included U.S. federal and state programs that were not identified in the notice of initiation of the CVD investigation.
“The duties imposed by China have raised the price of hundreds of millions of dollars’ worth of American steel headed into China, with the practical effect of reducing or blocking exports of our steel to that country. China must not abuse WTO procedures to protect its market,” said Ambassador Kirk. “This case makes clear that the United States will not permit China to threaten American steelworkers’ jobs by using antidumping and countervailing duty proceedings to harass U.S. exports.”
In the GOES AD investigation, MOFCOM imposed dumping margins ranging from 7.8 percent to 64.8 percent. In the GOES CVD proceeding, MOFCOM imposed CVD duties of between 11.7 percent and 44.6 percent.
This is somewhat big news, I think. Normally (although not always), it's the U.S. imposing AD/CVD measures, and other countries (including China) challenging these measures at the WTO. Now the tables have turned. Suddenly, the U.S. has a reason to argue for a broad scope for WTO trade remedy rules being used to restrict domestic trade remedy actions, and China will prefer a narrow scope. If this goes to the panel stage, it will be interesting to see how the parties argue the case.
