Electrical Steel Investigations Advance

by King & Spalding

[author: Brian McGill]

Two important electrical steel trade cases are advancing after affirmative preliminary determinations by the U.S. International Trade Commission (ITC) and the Department of Commerce (Commerce). The first case involves imports of grain-oriented electrical steel (GOES), which is used primarily in medium and large transformers that constitute important elements of the electrical grid due to superior magnetic properties in one direction. The second case involves non-oriented electrical steel (NOES), which has similar magnetic properties in all directions (i.e., non-oriented). NOES is primarily used to manufacture laminations that are assembled in stacks to produce magnetic cores for alternating-current electric apparatuses, such as motors and generators. AK Steel Corporation is the sole petitioner in the NOES action and is joined by Allegheny Technologies and the United Steelworkers union as petitioners in the GOES action.

The two actions are against unfair imports from multiple countries and involve many of the same foreign producers. Both trade actions involve antidumping complaints against imports from China, Germany, Japan, and Korea, with the GOES case also involving imports from the Czech Republic, Poland, and Russia, and the NOES case also involving imports from Sweden and Taiwan. Both actions also include complaints of illegal subsidies, with both the GOES and NOES cases pointing to subsidies to Chinese producers, and the NOES case also complaining of subsidies to Taiwanese and Korean producers.

The ITC issued affirmative preliminary determinations of material injury in both trade actions, with the GOES decision announced in November 2013 and the NOES decision announced in December 2013. Subsequently, Commerce issued affirmative preliminary countervailing duty and antidumping determinations in both the GOES and NOES actions. The preliminary GOES subsidy determination for Chinese producers was issued in early March, with a substantial preliminary countervailing duty rate of 49.15 percent on imports from all producers and exporters in China. The preliminary GOES antidumping determinations were issued in mid-May, with margins ranging from 5.34 percent for Korean producer POSCO to 241.91 percent for German producer Thyssen Krupp Steel. Commerce denied a request by Russian GOES producers for Commerce to suspend its antidumping investigation and enter into an agreement whereby imports from Russia would henceforth be sold at non-dumped prices.

The preliminary NOES countervailing duty rates were issued by Commerce in mid-March, with all Chinese producers and exporters again receiving a substantial rate, this time of 125.83 percent. In contrast, no countervailing duties were imposed in the Korean investigation. In the Taiwanese investigation, one mandatory respondent received a de minimis rate and the other received a rate of 12.82 percent. Preliminary NOES dumping margins were issued in mid-May and ranged from 6.91 percent for Korean producer POSCO to 407.52 percent for all NOES imports from China.

For all companies subject to affirmative preliminary antidumping or countervailing duty determinations, U.S. Customs and Border Protection will require cash deposits on entries going forward from the date of publication of the preliminary determinations by Commerce. Both the GOES and NOES investigations will now proceed to final countervailing duty and antidumping determinations before Commerce. Likewise, the final injury phases for both actions are now underway before the ITC. The ITC's GOES questionnaires to domestic producers, importers, foreign producers, and purchasers have been issued and responses are due during the first week of June. Responses to the ITC's NOES questionnaires will likely be due by the end of June.



DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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