New antidumping and countervailing duty petitions filed against imports of standard steel wire mesh from Mexico: Consequences for exporters and US importers

On June 30, 2020, Insteel Industries Inc., Mid-South Wire Company, National Wire LLC, Oklahoma Steel & Wire Co., and Wire Mesh Corp. filed petitions with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that standard steel wire mesh (“SSWM”) from Mexico is being sold in the United States at less than fair value and that the Mexican government is providing unfair subsidies to producers and exporters of SSWM in Mexico.  The petitioner seeks the imposition of antidumping (AD) and countervailing duties (CVD) on imports of SSWM from Mexico.  The petitioner alleges margins of dumping ranging from 55.9 percent to 160.74 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 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 product covered by the petitions is SSWM, which may also be referred to as welded wire fabric, welded wire cloth, or welded wire reinforcement.  Wire mesh is a metal wire screen made from low carbon steel wire rods that are drawn or rolled to a uniform size and formed into a sheet or roll of uniformly-sized grids that are welded at the intersections of the parallel and perpendicular wires.  See the complete scope description from the petitions.

The subject SSWM is classified under subheadings 7314.20.0000 and 7314.39.0000 of the Harmonized Tariff Schedule of the United States.

Specifically excluded from the scope of the petitions is wire mesh produced from steel wire that has been galvanized or coated with an epoxy coating either before or after welding.

The total value of US imports of SSWM from Mexico was $46.7 million in 2019.

Foreign producers and US importers of SSWM from Mexico

The petition identifies nine exporters and 24 US importers of SSWM from Mexico.  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 SSWM from Mexico.

6/30/2020 – Petition filed

8/14/2020 – ITC preliminary injury determination

9/23/2020 – DOC preliminary CVD determination, if not postponed

11/27/2020 – DOC preliminary CVD determination, if fully postponed

12/7/2020 – DOC preliminary AD determination, if not postponed

1/26/2021 – DOC preliminary AD determination, if fully postponed

6/17/2021 – DOC final AD and CVD determinations, if both preliminary and final determinations are fully postponed

8/2/2021 – ITC final injury determinations, if DOC’s determinations are fully postponed

8/9/2021 – 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.