Countervailing duty deposits now required; final decision expected in January On November 3, 2015, the United States Department of Commerce announced its preliminary determinations that imports of corrosion-resistant steel from China, India, Italy and South Korea are benefiting from unfair government subsidies and would be subject to counter-vailing duties. The Department of Commerce also found that subsidies of steel products from Taiwan were “de minimis” and therefore not subject to countervailing duties. Corrosion-resistant (CORE) steel is steel sheet that has been coated or plated with a corrosion- or heat-resistant metal to prevent corrosion and thereby extend the service life of the products made from the steel.  Steel coated with zinc, aluminum, or any of several zinc-aluminum alloys comprises most of the product at issue. CORE is widely used in infrastructure and construction applications such as roofing, siding, hardware, roof and bridge decks, guard rails, and culverts.  CORE is also used in the manufacture of automobiles, trucks, appliances, industrial equipment, and agricultural equipment.  The petitioners that initiated the Department of Commerce’s investigations are United States Steel Corporation, Nucor Corporation, ArcelorMittal USA, AK Steel Corporation, Steel Dynamics, Inc., and California Steel Industries, Inc. The products covered by the investigations include flat-rolled steel products, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys. As a result of the Department of Commerce’s preliminary findings, U.S. Customs and Border Protection will require U.S. importers of corrosion-resistant (CORE) steel to deposit estimated countervailing duties at the time of importation. In the China investigation, Commerce preliminarily determined that Yieh Phui (China) Technomaterial Co., Ltd. received a subsidy rate of 26.26 percent. Several other companies, after refusing to participate in the Department of Commerce investigation, received a subsidy rate of 235.66. All other producers/exporters in China have been assigned a preliminary subsidy rate of 26.26 percent. The other countervailing duty rates determined in the preliminary investigation are, for India, 2.85 to 7.71 percent; for Italy, up to 38.41 percent; for South Korea, up to 1.37 percent. Subsidies subject to countervailing duties include financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods. On October 30, 2015 the Commerce Department reached affirmative preliminary critical circumstances findings with respect to certain foreign producers of CORE.  As a result, the Commerce Department can impose countervailing duties retroactively beginning from August 4, 2015—90 days prior to its preliminary determination on counter-vailing duties—on certain imports of CORE from China, Italy and South Korea. The Commerce Department’s determinations follow the June 3, 2015 filing of anti-dumping and counter-vailing duty petitions by AK Steel and other domestic CORE producers. Steel industry sources reacted affirmatively to the Department of Commerce ruling. “AK Steel is pleased that the Commerce Department has made a preliminary ruling that imports of corrosion-resistant steel are being unfairly subsidized,” said James Wainscott, CEO of AK Steel, a producer of flat-rolled carbon, stainless and electrical steel products headquartered in West Chester, Ohio. “These determinations are an important step in ensuring that our foreign competitors play by the rules of fair trade.  Action is urgently needed to counteract the significant injury that is being caused by unfairly traded imports.” Wainscott added that the domestic steel industry has suffered lost sales and reduced profitability due to unfairly traded imports from these countries. AK Steel’s customers include companies in the automotive, infrastructure, manufacturing, construction, and electrical power generation and distribution markets.  A spokesperson for Steel Dynamics said the company is “very pleased” with the Department of Commerce’s preliminary findings. The next step in the trade action will be the Commerce Department’s verification of factual information submitted by the foreign producers and their governments.  There will then be an opportunity for parties to submit case and rebuttal briefs to the Commerce Department and to participate in a hearing.  Following these events, the Commerce Department will issue its final determinations.  The Commerce Department will make preliminary anti-dumping determinations with respect to all five countries on or about December 21, 2015.  Estimated anti-dumping duties resulting from those preliminary determinations by the Commerce Department are generally added to the estimated counter-vailing duties.  AK Steel and the other petitioners have alleged anti-dumping duties ranging from 120.20 percent to 71.09 percent. Commerce is scheduled to announce its final determination on or about January 19, 2016, unless the statutory deadline is extended. If Commerce makes affirmative final determinations, and the U.S. International Trade Commission (ITC) makes affirmative final determinations that imports of China, India, Italy, Korea, and/or Taiwan materially injure, or threaten material injury to, the domestic industry, Commerce will issue countervailing duty orders. If either Commerce’s or the ITC’s final determinations are negative, no CVD orders will be issued. The ITC is scheduled to make its final injury determinations in March 2015. According to a report released in October by the Department of Commerce, U.S. imports of steel mill products have trended upwards in the past few years, while exports have remained relatively flat. In August 2015, the steel trade deficit narrowed to -2 million metric tons from -2.2 million metric tons in July, a 9.6 percent decrease. Compared to the trade balance one year ago, the August 2015 steel trade gap has narrowed by 15.7 percent. In year-to-date 2015, U.S. imports of steel mill products totaled 25.5 million metric tons, a 2.1 percent decrease from 26 million metric tons through August 2014. Canada accounted for the largest share of U.S. imports at 14.2 percent, followed by Brazil, at 13.4 percent, and Korea, 13.1 percent. The U.S. has imported 10.6 million tons of flat products so far in 2015, accounting for 42 percent of total steel mill imports, followed by pipe and tube products at 5.2 million metric tons, or 20 percent of total imports. Chinese steel mill exports increased by 27.2 percent to 70.2 million metric tons through August 2015 over 55.2 million metric tons during the same period last year. South Korea received the largest share of Chinese steel exports at 8.7 million metric tons while the United States received the 12th largest share of Chinese steel exports at 2.3 percent, or 1.6 million metric tons, a decrease of 22.8 percent over 2014.