By many accounts, the US steel industry is in a significant downturn, which by some measures is nearly as bad as that suffered during the last recession. In response to this downturn, the US steel industry has filed a series of antidumping and countervailing duty trade cases against several steel products, including hot-rolled coils, cold-rolled coils and corrosion-resistant steel. The preliminary phase of each of these cases has been completed and additional duties have been imposed. However, the US industry has expressed disappointment with the duty levels and claims they are too low to remedy the injury caused by the unfair trade imports.
The US steel industry is now threatening additional trade cases, including a global safeguard case under section 201 of the US trade laws (Section 201). Unlike antidumping or countervailing duty investigations, which require a finding of unfair trade practices (dumping or subsidization) and are focused on a specific product from a specific set of countries, a Section 201 case is global, considers only injury to the domestic industry, and can cover a wide range of products. The last Section 201 case was filed in 2001 and covered a total of 33 product categories: nearly all types of steel and many steel products.
A section 201 case is filed with the International Trade Commission (ITC), which determines whether the domestic industry is suffering serious injury due to imports. Once filed, the ITC has 120 days to reach a decision (can be extended to 150 days). If the decision is affirmative, the ITC recommends a remedy to the president, who determines what relief, if any, is imposed. The president must reach his decision within 180 days of the petition being filed.
Section 201 cases are highly disruptive to US steel purchasers and users. Many types of specialty steel used by US manufacturers are either not produced in this country or not produced in sufficient quantity to meet demand. If a Section 201 case is filed, US manufacturers, purchasers, users and/or importers who are not directly impacted by the current antidumping or countervailing investigations could lose sources of supply.
Antidumping and countervailing duty cases are generally nonpolitical and nondiscretionary: If Commerce finds dumping or subsidization and the ITC finds injury, duties are imposed. This is not the case with a Section 201 case. The International Trade Commission determines whether the US industry has been seriously injured due to imports and whether a remedy is warranted. However, the president has the discretion to decide to provide any relief, and if so, the type and duration. Relief can include additional duties and/or quantitative restrictions (quotas). The president can also grant exclusions for particular products.
Dentons’ Public Policy and Regulation group is well positioned to assist clients in navigating the legal, policy, economic and technical aspects of a Section 201 case. We practice regularly before the ITC and represented clients in the previous 201 steel action. In the previous case, we were able to obtain exclusions for various specialty steel products. We are ready to assist clients with preparing for and participating in Section 201 cases including: assessing their supply chain risks, coalition building, and developing arguments for product exclusions, public affair campaigns and the legal and economic aspects of an investigation.