New antidumping and countervailing duty petition: Steel nails from India, Oman, Sri Lanka, Thailand and Turkey – consequences for industry and downstream consumers
On December 30, 2021, Mid Continent Steel & Wire, Inc. filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that certain steel nails from India, Sri Lanka, Thailand and Turkey are being sold in the US at less than fair value. The petition also alleges that the governments of Oman, Sri Lanka, Thailand, and Turkey are providing unfair subsidies to their producers and exporters of steel nails to the US.
The petitioner seeks the imposition of antidumping (AD) duties on imports of steel nails from India, Sri Lanka, Thailand and Turkey, alleging dumping margins of 65.70 to 98.12 percent for India, 33.46 to 99.33 percent for Sri Lanka, 63.86 to 65.28 percent for Thailand, and 31.78 to 35.98 percent for Turkey. The petitioner also seeks the imposition of countervailing (CVD) duties on imports of steel nails from Oman, Sri Lanka, Thailand, and Turkey, alleging an unspecified total level of subsidies of at least 1 percent for Oman, Thailand and Turkey, and at least 2 percent for Sri Lanka.
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 merchandise covered by the petition is certain steel nails having a nominal shaft or shank length not exceeding 12 inches. Certain steel nails include, but are not limited to, nails made from round wire and nails that are cut from flat-rolled steel or long-rolled flat steel bars. Certain steel nails may be of one-piece construction or constructed of two or more pieces. Examples of nails constructed of two or more pieces include, but are not limited to, masonry anchors comprised of an anchor made of zinc or nylon and a steel nail; zinc anchors; crimp drive anchors; split-drive anchors, and strike pin anchors. Also included in the scope are anchors of one-piece construction.
Certain steel nails may be produced from any type of steel, and may have any type of surface finish, head type, shank, point type and shaft diameter. Finishes include, but are not limited to, coating in vinyl, zinc (galvanized, including but not limited to electroplating or hot dipping one or more times), phosphate, cement, and paint. Certain steel nails may have one or more surface finishes. Head styles include, but are not limited to, flat, projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank or shaft styles include, but are not limited to, smooth, barbed, screw threaded, ring shank and fluted.
Screw-threaded nails subject to this proceeding are driven using direct force and not by turning the nail using a tool that engages with the head. Point styles include, but are not limited to, diamond, needle, chisel and blunt or no point. Certain steel nails may be sold in bulk, or they may be collated in any manner using any material.
Excluded from the scope are certain steel nails packaged in combination with one or more non-subject articles, if the total number of nails of all types, in aggregate regardless of size, is less than 25. If packaged in combination with one or more non-subject articles, certain steel nails remain subject merchandise if the total number of nails of all types, in aggregate regardless of size, is equal to or greater than 25, unless otherwise excluded based on the other exclusions below.
Also excluded from the scope are certain steel nails with a nominal shaft or shank length of one inch or less that are (a) a component of an unassembled article, (b) the total number of nails is sixty (60) or less, and (c) the imported unassembled article falls into one of the following eight groupings: (1) Builders’ joinery and carpentry of wood that are classifiable as windows, French-windows and their frames; (2) builders’ joinery and carpentry of wood that are classifiable as doors and their frames and thresholds; (3) swivel seats with variable height adjustment; (4) seats that are convertible into beds (with the exception of those classifiable as garden seats or camping equipment); (5) seats of cane, osier, bamboo or similar materials; (6) other seats with wooden frames (with the exception of seats of a kind used for aircraft or motor vehicles); (7) furniture (other than seats) of wood (with the exception of (i) medical, surgical, dental or veterinary furniture; and (ii) barbers’ chairs and similar chairs, having rotating as well as both reclining and elevating movements); or (8) furniture (other than seats) of materials other than wood, metal, or plastics (e.g., furniture of cane, osier, bamboo or similar materials). The aforementioned imported unassembled articles are currently classified under the following Harmonized Tariff Schedule of the United States (HTSUS) subheadings: 4418.10, 4418.20, 9401.30, 9401.40, 9401.51, 9401.59, 9401.61, 9401.69, 9403.30, 9403.40, 9403.50, 9403.60, 9403.81 or 9403.89.
Furthermore, the following products are excluded from the scope of this investigation:
- nails suitable for use in power-actuated hand tools, whether or not threaded, which are currently classified under HTSUS subheadings 7317.00.20.00 and 7317.00.30.00
- nails having a case hardness greater than or equal to 50 on the Rockwell Hardness C scale (HRC), a carbon content greater than or equal to 0.5 percent, a round head, a secondary reduced-diameter raised head section, a centered shank, and a smooth symmetrical point, suitable for use in gas-actuated hand tools
- corrugated nails, which are made up of a small strip of corrugated steel with sharp points on one side
- thumb tacks, which are currently classified under HTSUS subheading 7317.00.10.00
- upholstery tacks
The merchandise subject to the investigation is currently classified in the Harmonized Tariff Schedule of the United States under subheadings 7317.00.55.02, 7317.00.55.03, 7317.00.55.05, 7317.00.55.07, 7317.00.55.08, 7317.00.55.11, 7317.00.55.18, 7317.00.55.19, 7317.00.55.20, 7317.00.55.30, 7317.00.55.40, 7317.00.55.50, 7317.00.55.60, 7317.00.55.70, 7317.00.55.80, 7317.00.55.90, 7317.00.65.30, 7317.00.65.60 and 7317.00.75.00. Certain steel nails subject to this investigation also may be classified under HTSUS subheadings 7907.00.60.00, 8206.00.00.00.
The total value of imports of steel nails from India, Oman, Sri Lanka, Thailand, and Turkey was $263 million in 2020.
Foreign producers and US importers of steel nails
The petition identifies 30 exporters and 95 US importers of steel nails from India, Oman, Sri Lanka, Thailand, and Turkey. See the lists of exporters and US importers from the petition.
Estimated schedule of investigations
AD proceedings are conducted pursuant to a strict statutory time schedule. Below is an estimated schedule for the AD and CVD investigations on steel nails from India, Oman, Sri Lanka, Thailand, and Turkey.
12/30/2021 – Petition filed
2/14/2022 – ITC preliminary injury determination
3/25/2022 – DOC preliminary CVD determinations, if not postponed
5/30/2022 – DOC preliminary CVD determinations, if fully postponed
6/8/2022 – DOC preliminary AD determinations, if not postponed
7/28/2022 – DOC preliminary AD determinations, if fully postponed
12/19/2022 – DOC final AD and CVD determinations, if both preliminary and final determinations are fully postponed
1/31/2023 – ITC final injury determination, if DOC determinations are fully postponed
2/7/2023 – 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 – 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 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 February 14, 2022. 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.