The antidumping and countervailing duty cases, filed with the U.S. Department of Commerce and U.S. International Trade Commission (USITC), charge that low-priced imports of non-oriented electrical steel from six countries and grain-oriented electrical steel from seven countries cause or threaten “material injury” to U.S. petitioners.
Electrical steel is used by a wide variety of U.S. manufacturers, including automotive, appliance, electric motor, electric generation and equipment manufacturers. The electrical steel is used for parts of many products, such as household transformers, fans, power tools, welding equipment, magnets, compressors and pumps.
“Important specifications for electrical steel used by U.S. manufacturers are not produced in the United States, but they were included by the petitioners in this case,” said CITAC Counsel Lewis Leibowitz, a partner at HoganLovells. “Potentially prohibitive duties could be imposed on these imports, meaning that many U.S. purchasers of electrical steel could find themselves unable to buy electrical steel that meets their needs. U.S. steel users would be unable to compete with foreign producers of these downstream products, which are not subject to the antidumping and countervailing duties. In some cases, 80% of the sale price of these products consist of the cost of materials. The result will be the loss of business to overseas competitors who can purchase these steel products at globally competitive prices. The law ignores these competitive problems.”
“We are hearing reports from our members, particularly those involved in manufacturing parts for generators and motors, that this trade case is already having a severe impact on their ability to source the electrical steel they need to meet their customers’ specifications,” said William E. Gaskin, President of the Precision Metalforming Association. “If this material is not available in the U.S., the result is obvious: the trade case will cause our members’ customers to source the parts currently made by our members from our competitors in Mexico or other countries. We hope that the USITC and Commerce Department consider the needs of U.S. manufacturers, who provide good jobs at good wages to tens of thousands of Americans across the country, when considering the merits of this trade case.”
The trade cases now go to the Commerce Department which will continue the investigation, and calculate preliminary antidumping duties and countervailing duty determinations. The petitioners are asking for duties in the non-oriented steel case ranging from 51% to 397% and grain-oriented steel case ranging from 39% top258%. Duties of 100% are generally considered to be “prohibitive,” making it impractical to import.
“It simply makes no economic sense to impose duties on imports of steel products that are not available for purchase by U.S. steel consuming manufacturers in the U.S.,” continued Leibowitz. “CITAC will be closely monitoring these cases. The law and the agencies that enforce it should pay attention to the needs of consuming industries for globally competitive inputs.”
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The Consuming Industries Trade Action Coalition (CITAC) is a Washington, DC-based trade organization with one primary objective: to ensure that consuming industries and manufacturers in the United States have access to reliable supplies of globally-priced materials necessary for those industries to produce their products. For additional information, visit www.citac.info or contact Caitlin Andrews at (202) 828-7637 or caitlin.andrews@bgllp.com.
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