Commerce Department to Investigate Claims That China is Dodging Steel Tariffs

By Elizabeth Brotherton-Bunch
Nov 07 2016 |
Photo by Daniel Kulinski

American steelmakers allege that state-backed companies are sending product through Vietnam.

We interrupt your election eve reading to bring you news in the ongoing effort to address China’s massive industrial overcapacity.

The Commerce Department announced today that it will investigate complaints from several American steel companies — and supported by the United Steelworkers union — that Chinese state-backed companies are shipping steel through Vietnam to avoid U.S. tariffs.

If you are a regular reader of this blog, you know that the Commerce Department repeatedly has found that China is dumping steel into the U.S. market, and has issued several sets of anti-dumping and countervailing duties on certain imports to level the playing field for American workers and companies. 

Now it appears China is taking deliberate steps to avoid those duties, and the Commerce Department investigation is an important step in stopping this trade cheating, said AAM President Scott Paul:

“Much like a weed that won’t go away, Chinese steel products continue to crop up via new avenues to infect our open market. Despite dozens of successful trade cases and multiple promises to cut overcapacity, Chinese steelmakers are using every avenue possible to sell their oversupply in our market, even if it means sidestepping the law.”

U.S. Steel, ArcelorMittal, Nucor Corp., and AK Steel filed petitions back in September urging the Commerce Department to investigate. As the Wall Street Journal noted at the time, it appeared the companies have a strong case; shipments in steel from Vietnam to the U.S. increased to 312,329 tons in the first six months of 2016 — from 25,756 tons in 2015.

“The effects of China’s overcapacity are easy to see. American workers are struggling as our steelmakers are forced to compete against state-subsidized steel and our market is flooded with product priced below market value,” Paul said. “The current administration has made good strides to enforce trade law, but it will be up to the next president to hold Beijing accountable. With billions of import duties still unpaid over the past decade and Chinese companies trying to work around U.S. laws, our country’s makers need an advocate to enforce trade law and stop Chinese trade cheating.”