Commerce Preliminary Finds Countervailable Subsidization of Imports of Cold-Drawn Mechanical Tubing from the People’s Republic of China and India

• On September 19, 2017, the Department of Commerce (Commerce) announced its affirmative preliminary determinations in the countervailing duty (CVD) investigations of imports of cold-drawn mechanical tubing from the People’s Republic of China (China) and India.

• The CVD law provides U.S. businesses and workers with a transparent, quasi-judicial, and internationally accepted mechanism to seek relief from the market-distorting effects caused by unfair subsidization of imports into the United States, establishing an opportunity to compete on a level playing field.

• For the purpose of CVD investigations, a countervailable subsidy is financial assistance from a foreign government that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods.

• In the China CVD investigation, Commerce has calculated a preliminary subsidy rate of 35.69 percent for mandatory respondent Jiangsu Hongyi Steel Pipe Co., Ltd. and a preliminary subsidy rate of 33.31 percent for mandatory respondent Zhangjiagang Huacheng Import & Export Co., Ltd. Commerce determined a rate of 34.50 percent for all other Chinese producers and exports.

• In the India CVD investigation, Commerce has calculated a preliminary subsidy rate of 8.09 percent for mandatory respondent Goodluck India Limited and a preliminary subsidy rate of 3.04 percent for mandatory respondent Tube Investments of India Limited. Commerce has determined a rate of 5.99 percent for all other Indian producers and exporters.

• As a result of the preliminary affirmative determinations, Commerce will instruct U.S. Customs and Border Protection (CBP) to require cash deposits based on these preliminary rates.

• The petitioners are ArcelorMittal Tubular Products (OH), Michigan Seamless Tube, LLC (MI), PTC Alliance Corp. (PA), Webco Industries, Inc. (OK), and Zekelman Industries, Inc. (PA).

• The merchandise covered by these investigations is cold-drawn mechanical tubing of carbon and alloy steel (cold-drawn mechanical tubing) of circular cross-section, in actual outside diameters less than 331 mm, and regardless of wall thickness, surface finish, end finish or industry specification. The subject cold-drawn mechanical tubing is a tubular product with a circular cross-sectional shape that has been cold-drawn or otherwise cold-finished after the initial tube formation in a manner that involves a change in the diameter or wall thickness of the tubing, or both. The subject cold-drawn mechanical tubing may be produced from either welded (e.g., electric resistance welded, continuous welded, etc.)
or seamless (e.g., pierced, pilgered or extruded, etc.) carbon or alloy steel tubular products. It may also be heat treated after cold working. Such heat treatments may include, but are not limited to, annealing, normalizing, quenching and tempering, stress relieving or finish annealing. Typical cold-drawing

methods for subject merchandise include, but are not limited to, drawing over mandrel, rod drawing, plug drawing, sink drawing and similar processes that involve reducing the outside diameter of the tubing with a die or similar device, whether or not controlling the inside diameter of the tubing with an internal support device such as a mandrel, rod, plug or similar device.

• The products subject to the investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7304.31.3000, 7304.31.6050, 7304.51.1000, 7304.51.5005, 7304.51.5060, 7306.30.5015, 7306.30.5020, 7306.50.5030. Subject merchandise may also enter under numbers 7306.30.1000 and 7306.50.1000. The HTSUS subheadings above are provided for convenience and customs purposes only. The written description of the scope of the investigation is dispositive.

• In 2016, imports of cold-drawn mechanical tubing from China and India were valued at an estimated
$29.4 million and $25 million, respectively.

NEXT STEPS
• Commerce is scheduled to announce its final determinations on or about December 4, 2017, unless the statutory deadline is extended.

• If Commerce makes affirmative final determinations, and the U.S. International Trade Commission (ITC) makes affirmative final determinations that imports of cold-drawn mechanical tubing from China and/or India materially injure, or threaten material injury to, the domestic industry, Commerce will issue CVD orders. If either Commerce’s or the ITC’s final determinations are negative, no CVD orders will be issued. The ITC is scheduled to make its final injury determinations approximately 45 days after Commerce issues its final determinations, if affirmative.

PRELIMINARY SUBSIDY RATES:

CASE CALENDAR

IMPORT STATISTICS:

Source: U.S. Census Bureau, accessed through Global Trade Atlas. (HTSUS 7304.31.3000, 7304.31.6050, 7304.51.1000, 7304.51.5005, 7304.51.5060, 7306.30.5015, 7306.30.5020, and 7306.50.5030) Subject merchandise may also enter under HTSUS subheadings 7306.30.1000 and 7306.50.1000. However, these HTSUS subheadings are basket categories that may cover both subject and non-subject merchandise; therefore, these HTSUS subheadings have been excluded for purposes of reporting the above import statistics.