PRC Steel Gets Hit by US Sanctions Yet Again

If you're getting somewhat confused by the plethora of unilateral US actions against Chinese steel, let me elaborate on the process a bit. First, complainants take their case to the US Department of Commerce. If the DoC finds ground for dumping, then preliminary duties are imposed to bring prices Stateside closer to perceived fair market value. While duties are being finalized by the DoC, the US International Trade Commission (USITC) is typically tasked with determining whether there is material injury or the threat of material injury to domestic industry. In effect, USITC either approves or rescinds the DoC findings to impose preliminary duties.

With steel pipe, the DoC had already made a determination to apply preliminary duties; what happened was USITC concurrence that allowed the imposition of duties to proceed. Today, we receive news that the Department of Commerce has assented to applying yet more steel tariffs--this time on wire decking. What exactly is "wire decking"? From what I can gather, it's used for building racks for storage. Again, the difference here is that the USITC has yet to weigh in on the DoC finding. Reuters has the skinny:

The United States on Tuesday slapped additional duties of 43 to 289 percent on imports of more than $300 million worth of a steel product from China, the U.S. Commerce Department said. The action against Chinese-made wire decking that the department said is being sold at unfairly low prices inaugurates what is likely to be another year of trade friction between the United States and its top import supplier.

The preliminary anti-dumping duties imposed on Tuesday are in addition to [countervailing] duties ranging from 2 to 438 percent announced by the Commerce Department in November to offset government subsidies given to Chinese wire decking producers.

Last week, the U.S. International Trade Commission approved duties ranging from 10 to 16 percent on some $2.74 billion worth of Chinese-made oil well tubing and casing in the biggest U.S. trade case against China. The same day, the United Steelworkers union and four U.S. companies filed a new petition asking for duties of at least 109 to 274 percent on Chinese-made drill pipe [this will be interesting to watch].

The United States imported some $200 million worth of drill pipe from China in 2008. Wire decking is mainly used in industrial and commercial storage rack systems. U.S. producers including AWP Industries Inc, ITC Manufacturing Inc, J&L Wire Cloth Inc, Nashville Wire Products Mfg Co Inc, and Wireway Husky Corporation asked for duties last year after imports from China surged to $317 million in 2008 from almost $213 million in 2006...

[Chinese] Companies will have to post bonds or make cash deposits based on the preliminary rates [implied by the duties]. The Commerce Department will issue its final calculations of anti-dumping and countervailing duties in the coming months. Chinese producers and exporters could still escape the duties if the U.S. International Trade Commission determines U.S. producers have not been materially injured, or threatened with material injury, by the imports. That vote is set for July.

I think a major PRC pushback against these unilateral measures is long overdue, though you probably expect me to say that ;-) In any event, 2010 has had an unpromising start on the US-China trade relations front.