Will the ITC Investigate Claims China Fixed Prices, Stole Trade Secrets and Skirted Duties?

By Elizabeth Brotherton-Bunch
May 25 2016 |
Inside the hot strip mill pulpit at U.S. Steel Great Lakes Works in Michigan. | Photo courtesy U.S. Steel

There’s big support for the U.S. Steel trade case, including from Members of Congress.

The deadline is almost here.

The International Trade Commission (ITC) must decide by Thursday whether it will initiate an investigation into allegations put forth by U.S. Steel that Chinese steel companies conspired to fix prices, stole trade secrets and mislabeled products to avoid U.S. trade duties.

Dozens of Members of Congress from both parties are voicing their support for U.S. Steel’s trade compliant, along with five governors, state and local legislators from across the country and other officials. A number of unions, trade associations, U.S. Steel customers and suppliers also have urged the ITC to investigate the claims.

The U.S. Steel trade case, filed under section 337 of the Tariff Act of 1930, is a very big deal. If the ITC decides to move ahead, an administrative law judge will be assigned to the case and formal hearings will be held. And if the allegations are eventually found to be true, major penalties could be issued — including the banning of unfairly traded Chinese steel imports.

Reps. Mike Bost (R-Ill.) and Rick Nolan (D-Minn.) led the congressional effort to gather support. More than 40 House Members signed onto a letter sent to ITC Chairman Meredith Broadbent to urge “full consideration” into the case and a “robust investigation” of U.S. Steel’s claims. They wrote:

“The impact of Chinese steel produced with unfair methods of competition and other illegal practices has significantly disrupted the marketplace and profoundly harmed domestic steel producers, resulting in declining production, the idling of steel producing facilities and the layoff of 12,000 hardworking Americans. We strongly urge you to ensure that U.S. Steel is permitted to present its case in full. The families of those laid off and local impacted communities deserve a transparent adjudicatory process that will unmask illegal trade practices.”

The United Steelworkers have made it clear they are backing U.S. Steel in the trade case. President Leo Gerard said in a statement that the filing is “bold, but necessary.”

“China has made clear that it wants to reap the benefits of trade without abiding by the rules it agreed to follow. Repeatedly China has broken the rules — often with no response,” Gerard said. “This effort is adding a new arrow in the quiver to attack their actions. We will continue to do whatever it takes to ensure that America’s steel producers and workers can continue to support our national and economic security.”

It’s a busy week for steel-related matters at the ITC. The commission on Tuesday heard testimony on unfairly traded flat-rolled steel and is scheduled to hold a hearing on Thursday morning looking at whether to issue antidumping and countervailing duties against corrosion-resistant steel products from a number of countries, including China.