US for 236% Anti Subsidy Duty on Chinese Galvanized Steel, India at 7.7 percent

Imports of some corrosive-resistant steel from China may be taxed as much as 236 percent based on the level of subsidies they receive, according to a preliminary finding by the U.S. Department of Commerce.

The department found five Chinese exporters including Angang Group Hong Kong Co. and Baoshan Iron & Steel Co. got subsidies of that amount, it said in an e-mailed statement. U.S. Customs and Border Protection will be instructed to require cash deposits based on the subsidy rates.

The preliminary finding is the first decision in three sets of trade cases that U.S. steel producers have filed this year, as a glut of output from foreign producers led by China has pushed down prices to nine-year lows and seen U.S. mills idle 31 percent of capacity. If validated, the decision may end some imports and help lift domestic prices.

The U.S. takes only about 3 percent of Chinese overseas sales. China shipments are facing increasing trade friction globally and probably won’t exceed 100 million metric tons in 2015. Sales surged 27 percent to 83 million tons in the first nine months.

Surging Imports

Five Chinese companies boycotted in the probe. Another company, Yieh Phui (China) Techno material Co., received a subsidy rate of 26.3 percent, the Department of Commerce found.

India too in Net

Companies from India were subsidized as much as 7.7 percent, while Italy supported exports by as much as 38.4 percent, according to the preliminary findings. Exports from South Korea received as much as 1.4 percent subsidies, while shipments from Taiwan had minimal support, it said.

On June 3, six domestic steel producers including Nucor Corp. and U.S. Steel Corp. filed cases against anti-corrosive steel from China, South Korea, India, Italy and Taiwan. Imports of the anti-corrosive steel from the five target countries surged by 84 percent in 2014, while imports of all steel products jumped by 38 percent to 40.2 million tons, according to the U.S. Census Bureau.

Anti-corrosive steel is a form of the metal that has been galvanized, coated with zinc, aluminum or other treatments to keep it from rusting.

On Oct. 30, the Department of Commerce found that at the beginning of the investigation, imports jumped from four of the five countries, China, South Korea, Taiwan and Italy. Such a finding of so-called critical circumstances allows the department to enact retroactive duties on those shipments. Commerce is scheduled to issue estimates of anti-dumping duties in the case on Dec. 21.