On May 26, 2016, the United States International Trade Commission (USITC) initiated an investigation under 19 U.S Code Section 1337 – Unfair practices in import trade, (“section 337”) directed at certain carbon and alloy steel products from China, Investigation No. 337-TA-1002.

Under section 337, the USITC determines whether there is unfair competition in the importation of products into, or their subsequent sale in, the United States. Section 337 can declare unlawful certain unfair methods of competition and unfair acts in the importation and subsequent sale of products in the United States, the threat or effect of which is to destroy or substantially injure a domestic industry, prevent the establishment of such an industry, or restrain or monopolize trade and commerce in the United States.

Section 337 investigations require formal evidentiary hearings which are held before an administrative law judge (ALJ). Parties to these investigations include complainants, respondents, and the USITC attorney representing the public interest. If a violation is found, the USITC may issue orders barring the importation of certain products into the United States.

The current investigation is based on a complaint filed by U.S. Steel Corporation which alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain carbon and alloy steel products through one or more of the following unfair acts: (1) a conspiracy to fix prices and control output and export volumes, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; (2) the misappropriation and use of U.S. Steel’s trade secrets; and (3) the false designation of origin or manufacturer, in violation of the Lanham Act, 15 U.S.C. § 1125(a). The complainants request that the USITC issue a general exclusion order, a limited exclusion order, and cease and desist orders.

The USITC is required to conclude its investigation at the earliest practicable time, and must, within 45 days after an investigation is instituted, establish a target date for issuing its final determination. This initial target date usually ranges from 12 -18 months from the initiation of the investigation. If the USITC finds that the importation of the accused articles substantially injures or threatens to substantially injure an industry, prevents the establishment of such an industry, or restrains or monopolizes trade and commerce in the United States, it may issue exclusion and/or cease and desist orders.

USITC orders are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period. Appeals of USITC determinations may be taken to the U.S. Court of Appeals for the Federal Circuit. Violators of USITC section 337 orders are liable for civil penalties of up to $100,000 a day, or twice the value of the imported articles.

The USITC has identified the following as respondents in this investigation:

Hebei Iron and Steel Group Co., Ltd., of Shijiazhuang City, Hebei Province, China;
Hebei Iron & Steel Group Hengshui Strip Rolling Co., Ltd., of Hengshui City, Hebei Province, China;
Hebei Iron & Steel (Hong Kong) International Trade Co., Ltd., of Hong Kong, China;
Shanghai Baosteel Group Corporation of Shanghai, China;
Baoshan Iron & Steel Co., Ltd., of Shanghai, China;
Baosteel America Inc. of Montvale, NJ;
Jiangsu Shagang Group of Zhangjiagang, Jiangsu Province, China;
Jiangsu Shagang International Trade Co., Ltd., of Zhangjiagang, Jiangsu Province, China;
Anshan Iron and Steel Group of Anshan City, Liaoning Province, China;
Angang Group International Trade Corporation of Anshan, Liaoning Province, China;
Angang Group Hong Kong Co. Ltd. of Wanchai, Hong Kong, China;
Wuhan Iron and Steel Group Corp. of Hubei Province, China;
Wuhan Iron and Steel Co., Ltd., Wuhan City, Hubei Province, China;
WISCO America Co., Ltd., Newport Beach, CA;
Shougang Group of Beijing, China;
China Shougang International Trade & Engineering Corporation of Beijing, China;
Shandong Iron and Steel Group Co. Ltd. of Jinan City, Shandong Province, China;
Shandong Iron and Steel Co., Ltd., Jinan City, Shandong Province, China;
Jigang Hong Kong Holdings Co., Ltd., of Wan Chai, Hong Kong, China;
Jinan Steel International Trade Co., Ltd., of Jinan City, Shandong Province, China;
Magang Group Holding Co. Ltd. of Maanshan City, Anhui Province, China;
Maanshan Iron and Steel Co. Ltd. of Maanshan City, Anhui Province, China;
Bohai Iron and Steel Group of Tianjin, China;
Tianjin Pipe (Group) Corporation of Tianjin Province, China;
Tianjin Pipe International Economic & Trading Corporation of Tianjin Province, China;
TPCO Enterprise, Inc., Houston, TX;
TPCO America Corporation of Gregory, TX;
Benxi Steel (Group) Co. Ltd. of Benxi City, Liaoning Province, China;
Benxi Iron and Steel (Group) International Economic and Trading Co. Ltd. of Benxi City, Liaoning Province, China;
Hunan Valin Steel Co. Ltd. of Changsha City, Hunan Province, China;
Hunan Valin Xiangtan Iron and Steel Co. Ltd. of Xiangtan City, Hunan Province, China;
Tianjin Tiangang Guanye Co., Ltd., of Tianjin, China;
Wuxi Sunny Xin Rui Science and Technology Co., Ltd., of Wuxi Province, China;
Taian JNC Industrial Co., Ltd., Tai’an City, Shandong Province, China;
EQ Metal (Shanghai) Co., Ltd., Shanghai, China;
Kunshan Xinbei International Trade Co., Ltd., Jiangsu, China;
Tianjin Xinhai Trade Co., Ltd., Tianjin, China;
Tianjin Xinlianxin Steel Pipe Co., Ltd., of Tianjin, China;
Tianjin Xinyue Industrial and Trade Co., Ltd., of Tianjin, China; and
Xian Linkun Materials (Steel Pipe Supplies) Co., Ltd., Xi’an City, Shaanxi Province, China.

Importers of steel products from China are advised to review the above list to determine if any of their suppliers are respondents in the investigation, and if so, may wish to take preliminary steps to explore alternate sources of supply in the event the ITC would issue a positive determination as to a finding of unfair trade practices and accompanying injury to the US industry. Also, the Braumiller Law Group will continue to monitor the investigation and provide updates to this advisory when significant developments occur.