On September 19th, the Department of Commerce announced that they will impose preliminary countervailing duties (“CVD”) on Chinese and Indian exports of cold-drawn mechanical tubing of carbon and alloy steel. See the fact sheet here.
Commerce determined that China and India received countervailable subsidies benefiting the production of mechanical steel tubing from their respective governments. Previously, on June 2nd, the U.S. International Trade Commission (“ITC”) had unanimously determined that there is a reasonable indication that a U.S. industry is materially injured by reason of unfairly traded imports of cold-drawn mechanical tubing from China, Germany, India, Italy, Korea, and Switzerland that are allegedly sold in the United States at less than fair value and subsidized by the governments of China and India.
Commerce preliminarily determined that Chinese producers and exporters receive a number of subsidies in land use, electricity, inputs, financing, preferential tax policies, grants, and export assistance, while Indian companies received aid from preferential income tax deductions and several national and state-level export assistance programs.
Chinese companies Jiangsu Hongyi Steel Pipe Co. Ltd. and Zhangjiagang Huacheng Import & Export Co. Ltd., received a subsidy rate of 35.69 percent and 33.31 percent respectively. All other Chinese producers/exporters received a rate of 34.5 percent. Commerce calculated a rate of 8.09 percent for Indian company Goodluck India Ltd. and a rate of 3.04 percent for Tube Investments of India Ltd. All other Indian producers/exporters received a rate of 5.99 percent. Due to these initial determinations, Commerce is requiring Customs and Border Protection to collect cash deposits, at the preliminary rates, on mechanical tubing imports from the subject countries.