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Datamyne Blog

Covering trade & transport, with tips on using import-export data to advantage

Playing Whack-a-Mole with US Steel Imports

Category: Markets, Trade Data

“It can be like whack-a-mole,” one steelmaker exec told us recently. “AD/CVD duties do have an effect, but there is so much excess steel capacity in the world that when, say, China is blocked, here comes the steel from someplace else. Countries are watching for any market openings.”

US steelmakers have been pushing back against competition from abroad they say has flooded the US with below market rate products, and they’ve petitioned the Commerce Department to do something about it.

The US petitioners appeared to have scored wins on three investigations launched by Commerce’s International Trade Commission in 2015, with preliminary anti-dumping and countervailing duties (AD/CVD) imposed late last year and finalized this September for imports of corrosion-resistant (CORE) steel from five countries, cold-rolled steel from eight countries, and hot-rolled steel from seven countries. [See US Steelmakers Pushback for the details and case numbers.]

Some of the stiffest penalties fell on Chinese CORE steel  … and US steel imports from this source dropped like a stone.

But even as the ITC finalized the new AD/CVD rates, US steelmakers were asking Commerce to look into a sudden surge in CORE steel imports from Vietnam.

The US producers allege that Chinese exporters are evading the punishing tariffs by shipping their products to Vietnam, where they are modified and re-classified as Vietnamese before being shipped on to the US.

The data on US steel imports

Here’s what the trade data on US steel imports shows: The AD/CVD duties put the brakes on CORE steel coming in from South Korea, Taiwan, India, Italy and, especially, China. US import volumes from China fell 96% through the first three quarters of this year compared with the same period in 2015.

Meanwhile, US-bound shipments of CORE steel from Vietnam increased more than 5,000%, and Vietnam vaulted from 24th to 5th rank among countries of origin for US imports of this product.

US steel imports: impact of AD/CVD

Another round of whack-a-mole? It looks like it … On the other hand, it should be noted that some US importers argue the product modifications in Vietnam amount to a “substantial transformation,” that not all the Vietnamese CORE steel starts with Chinese substrate, and that punitive tariffs would unfairly penalize them.

The Commerce Dept. will make the final call. On November 7, it announced a new investigation into whether this trade is aimed at evading the AD/CVD duties on China’s exports. [Refer to case numbers A-570-026, C-570-027 on the ITA Access website.]

 

Related blog posts:

You may also be interested in our Steel Import Market Insight:

Date posted: November 22, 2016

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