New antidumping and countervailing duty petitions filed against imports of seamless carbon and alloy steel standard, line and pressure pipe from the Czech Republic, the Republic of Korea, Russia and Ukraine: Consequences for exporters and US importers
On July 8, 2020, Vallourec Star, LP filed petitions with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that seamless carbon and alloy steel standard, line, and pressure pipe (“SSLPP”) from the Czech Republic, the Republic of Korea (“Korea”), Russia, and Ukraine is being sold in the United States at less than fair value and that the governments of Korea and Russia are providing unfair subsidies to producers and exporters of SSLPP in Korea and Russia. The petitioner seeks the imposition of antidumping (AD) duties on imports of SSLPP from the Czech Republic, Korea, Russia, and Ukraine; and countervailing duties (CVD) on imports of SSLPP from Korea and Russia. The petitioner alleges margins of dumping ranging from 48.18 percent to 49.42 percent for the Czech Republic, 119.07 percent to 132.16 percent for Korea, 30.31 percent to 246.31 percent for Russia, and 40.28 percent to 40.44 percent for Ukraine.
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 United States at less than fair value (ie, dumped). A domestic industry can also seek the initiation of a CVD investigation into alleged subsidization of foreign producers by a foreign government. Additional duties can be imposed if the DOC determines that imported goods are dumped and/or subsidized and if the ITC also determines that the domestic industry is materially injured or threatened with such injury by reason of the subject imports.
Products covered by the investigations
The products covered by the petitions are seamless carbon and alloy steel (other than stainless steel) pipes and redraw hollows, less than or equal to 16 inches (406.4 mm) in outside diameter, regardless of wall-thickness, manufacturing process (e.g., hot-finished or cold-drawn), end finish (e.g., plain end, beveled end, upset end, threaded, or threaded and coupled), or surface finish (e.g., bare, lacquered or coated). Redraw hollows are any unfinished carbon or alloy steel (other than stainless steel) pipe or “hollow profiles” suitable for cold finishing operations, such as cold drawing, to meet the American Society for Testing and Materials (“ASTM”) or American Petroleum Institute (“API”) specifications referenced below, or comparable specifications. Specifically included within the scope are seamless carbon and alloy steel (other than stainless steel) standard, line, and pressure pipes produced to the ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-589, ASTM A-795, ASTM A1024, and the API 5L specifications, or comparable specifications, and meeting the physical parameters described above, regardless of application.
SSLPP is normally entered under subheadings 7304.19.1020, 7304.19.1030, 7304.19.1045, 7304.19.1060, 7304.19.5020, 7304.19.5050, 7304.31.6050, 7304.39.0016, 7304.39.0020, 7304.39.0024, 7304.39.0028, 7304.39.0032, 7304.39.0036, 7304.39.0040, 7304.39.0044, 7304.39.0048, 7304.39.0052, 7304.39.0056, 7304.39.0062, 7304.39.0068, 7304.39.0072, 7304.51.5005, 7304.51.5060, 7304.59.6000, 7304.59.8010, 7304.59.8015, 7304.59.8020, 7304.59.8025, 7304.59.8030, 7304.59.8035, 7304.59.8040, 7304.59.8045, 7304.59.8050, 7304.59.8055, 7304.59.8060, 7304.59.8065, and 7304.59.8070. of the Harmonized Tariff Schedule of the United States (HTSUS).
Specifically excluded from the scope of the investigations are: (1) all pipes meeting aerospace, hydraulic, and bearing tubing specifications; (2) all pipes meeting the chemical requirements of ASTM A-335, whether finished or unfinished; and (3) unattached couplings. Also excluded from the scope of the investigation are all mechanical, boiler, condenser and heat exchange tubing, except when such products conform to the dimensional requirements, i.e., outside diameter and wall thickness, of ASTM A-53, ASTM A-106 or API 5L specifications.
In 2019, the value of US imports of SSLPP was $48.7 million from the Czech Republic, $25.5 million from Korea, $49.0 million from Russia, and $50.7 million from Ukraine.
Foreign producers and US importers of SSLPP from the Czech Republic, Korea, Russia, and Ukraine
The petition identifies three exporters of SSLPP from the Czech Republic, three from Korea, two from Russia, and one from Ukraine; and 45 US importers of SSLPP. See the lists of exporters and importers from the petitions.
Estimated schedule of 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 SSLPP from the Czech Republic, Korea, Russia, and Ukraine.
7/8/2020 – Petition filed
8/21/2020 – ITC preliminary injury determination
10/1/2020 – DOC preliminary CVD determination, if not postponed
12/7/2020 – DOC preliminary CVD determination, if fully postponed
12/15/2020 – DOC preliminary AD determination, if not postponed
2/3/2021 – DOC preliminary AD determination, if fully postponed
6/25/2021 – DOC final AD and CVD determinations, if both preliminary and final determinations are fully postponed
8/9/2021 – ITC final injury determinations, if DOC’s determinations are fully postponed
8/16/2021 – AD/CVD orders published
Consequences for exporters and US importers
US AD and CVD investigations can result in the imposition of substantial duties, in addition to other already applicable duties and tariffs. If the ITC and DOC make affirmative preliminary determinations, US importers will be required to post cash deposits in the amount of the AD and/or CVD duties for all subject entries on or after the date when DOC’s preliminary determination is published in the Federal Register. In certain circumstances, such duty deposit requirements can go into effect retroactively, 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 producers and exporters selected for examination. Such rates often can be much lower than those alleged in the petition. However, producers and exporters that do not participate in the investigations may be subject to substantially higher margins. Duties imposed at these higher margins can force exporters to stop shipping to the United States and importers to cease importation of subject merchandise. Thus, interested parties (including foreign producers, exporters, importers, and foreign governments) should 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 (the preliminary ITC determination 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. An ITC hearing (public conference) is held about 21 to 23 days after the filing date. As a result, agency staff work begins almost immediately. Thus, a quick response is essential to understand the specific implications of these developments and to prepare and implement a pertinent strategy.
To learn more, please contact any of the authors.
