New antidumping and countervailing duty petition: non-refillable steel cylinders from India

On April 27, 2023, Worthington Industries filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that non-refillable steel cylinders from India are being sold in the US at less than fair value. The petition also alleges that that the government of India is providing unfair subsidies to its producers and exporters of non-refillable steel cylinders to the US.

The petitioner seeks the imposition of antidumping (AD) duties on imports of non-refillable steel cylinders from India, alleging dumping margins of 11.20 percent to 56.52 percent. The company also seeks the imposition of countervailing (CVD) duties on these imports, alleging an unspecified total level of subsidies exceeding one percent.

Under US law, a domestic industry can petition the government to initiate an AD investigation to determine whether an imported product is sold in the US at less than fair value (ie, dumped). A domestic industry may also seek a CVD investigation into alleged subsidization of foreign producers or exporters by a foreign government. AD/CVD duties may be imposed if the DOC determines that imported goods are dumped and/or unfairly subsidized and if the ITC determines that the domestic industry is materially injured or threatened with such injury by reason of the subject imports.

Products covered by the petition

The petition covers seamed (welded or brazed), non-refillable steel cylinders meeting the requirements of, or produced to meet the requirements of, US Department of Transportation specification 39, TransportCanada specification 39M, or United Nations pressure receptacle standard ISO 11118. The non-refillable steel cylinders covered by the petition are portable and range from 100-cubic inch (1.6 liter) water capacity to 1,526-cubic inch (25 liter) water capacity. They may be imported with or without a valve and/or pressure release device and are unfilled at the time of importation. Non-refillable steel cylinders filled with pressurized air meeting the physical description above are also covered by the petition.

The petition does not cover seamless non-refillable steel cylinders.

The products covered by the petition are provided for under subheadings 7311.00.0060 and 7311.00.0090 of the Harmonized Tariff Schedule of the United States (HTSUS).  They may also be classified under HTSUS subheadings 7310.29.0030 and 7310.29.0065.

The total value of U.S. imports of non-refillable steel cylinders from India was $61.2 million in 2022.

Foreign producers and US importers of non-refillable steel cylinders

The petition identifies five exporters and 31 US importers of non-refillable steel cylinders from India.  See the lists of foreign producers and US importers from the petition.

Estimated schedule of the investigations

AD and CVD proceedings are conducted pursuant to a strict statutory time schedule. Below is an estimated schedule for the AD and CVD investigations on non-refillable steel cylinders from India.

4/27/2023 – Petition filed

6/12/2023 – ITC preliminary injury determination

7/21/2023 – DOC preliminary CVD determination, if not postponed

9/25/2023 – DOC preliminary CVD determination, if fully postponed

10/4/2023 – DOC preliminary AD determinations, if not postponed

11/24/2023 – DOC preliminary AD determinations, if fully postponed

4/15/2024 – DOC final AD and CVD determinations, if both preliminary and final determinations are fully postponed

5/28/2024 – ITC final injury determination, if DOC determinations are fully postponed and DOC final determinations are aligned

6/4/2024 – AD and CVD orders published

Consequences for exporters and US companies

US AD and CVD investigations can result in the imposition of substantial duties in addition to already-applicable duties and tariffs. If the ITC and DOC make affirmative preliminary determinations, US importers will be required to post cash deposits corresponding to the ad valorem AD and/or CVD duty rates determined for the subject merchandise on or after the date on which the DOC’s preliminary determination is published in the Federal Register. In certain circumstances, such duty deposit requirements may retroactively go into effect 90 days prior to the date of publication. The AD and CVD duties will remain in effect if the DOC and ITC make affirmative final determinations.

The DOC calculates specific AD and CVD margins for certain individual foreign producers and exporters selected for examination. Such rates are often much lower than those alleged in the petition. However, foreign producers and exporters that do not participate in the investigations may be subject to substantially higher rates. Duties imposed at these higher rates may force exporters to stop shipping to the US and importers to cease importation of subject merchandise. Thus, interested parties – including US and foreign producers, exporters, importers and downstream US purchasers of the subject merchandise – are encouraged to have a strategy for addressing AD and CVD investigations, including possible participation.

Under the statutory time schedule for AD and CVD investigations, the first decision (ie, the preliminary ITC determination of whether there is a reasonable indication that the US industry is materially injured, or threatened with material injury, by reason of the subject imports) must be made within 45 days after the filing of the petition – in this case, by June 12, 2023. An ITC hearing (ie, a public conference) is held around 21 to 23 days after the filing date. As a result, agency staff work, including the issuance of questionnaires to interested parties, begins almost immediately. Thus, quick action is encouraged to understand the specific implications of these developments as well as to prepare and implement a pertinent strategy.

To learn more, please contact any of the authors.