Industryweek 10975 Steel

Chinese Steel Producer Challenges US Steel Trade Complaint

May 13, 2016
“Never before has a single company sought to use this agency to erect what would be a total blockade of steel trade from an entire country,”  said Baosteel  Iron & Steel Co., China’s second-largest steelmaker.

Baoshan Iron & Steel Co., China’s second-largest steelmaker, urged a U.S. trade agency to reject a complaint filed by U.S. Steel Corp. to block imports from the Asian nation.

“Never before has a single company sought to use this agency to erect what would be a total blockade of steel trade from an entire country,” Baosteel’s American unit said in a May 11 filing with the U.S. International Trade Commission in Washington.

Baosteel’s submission was one of more than a dozen filed either in favor or against U.S. Steel’s complaint. The complaint pits steel makers against some U.S. packaging companies who say they can’t get the products they need from domestic suppliers.

The American company filed the complaint on April 26, claiming that Chinese steel products are being made using stolen technology obtained by government hackers, and accusing the Chinese companies of anti-competitive pricing and sending shipments through intermediaries to skirt U.S. restrictions.

Baosteel said that those types of allegations, even if true, should be addressed between trade officials of the two countries, not through a process that’s usually used for patent-infringement cases. It said a victory for U.S. Steel “would have profound and long-lasting adverse effects” on economic relations between the U.S. and China.

Hunan Valin Steel Co., another Chinese manufacturer named in the case, said U.S. Steel’s actions are “not a campaign against individual private entities but a campaign against the Chinese government itself.”

Some of Baosteel’s customers and distributors, including Ball Metal Food Container LLC, Coastal Pipe USA LLC, and the Allstate Can Corp., also asked the ITC not to institute an investigation of the complaint.

Steelworkers’ Union

“If new products developed by Baosteel are blocked for importation into the United States, it will cause harm to our economy and to the public health and safety of the public, as these products are not being developed by the domestic tin plate producers,” Allstate Can wrote.

U.S. Steel’s complaint has the backing of other U.S. steel producers and the industry’s workers. The largest U.S. steelworkers’ union said membership is in decline and more than 13,500 members are on layoff.

“The future viability of the domestic steel producing sector is at risk because of continuing unfair and predatory practices such as those alleged in the complaint,” the United Steelworkers wrote to the agency.

The case filed by U.S. Steel focuses on advanced high-strength material used in the automotive industry, which requires light, flexible steel that’s corrosion resistant and “able to take a flawless paint finish.” U.S. Steel said it plans to expand into the markets for agriculture and heavy machinery, and has spent millions of dollars in research over a decade, according to the complaint.

Steel Buyers

Some of the companies that buy Chinese steel say they do so because their needs aren’t met by U.S. producers.

Allstate, which makes products such as decorative cookie tins, said that neither U.S. Steel nor ArcelorMittal SA wanted to work with such a small customer, and Bway Corp., which makes containers such as paint cans, said U.S. manufacturing is concentrated among a few companies with “no known plans to increase investment to improve performance or innovate” in tin mill products.

The American Iron and Steel Institute countered that the domestic steel industry has “substantial available unused capacity” to meet the needs of companies now buying from China.

‘Additional Investment’

An import ban on the Chinese steel would allow domestic producers “to increase production and employment in the steel industry in the United States, and would encourage additional investment in the domestic steel industry,” the institute wrote.

Senator Bob Casey, a Pennsylvania Democrat, urged the agency to “move forward in this case” and “apply the law to its fullest to ensure competitors are playing by the same rules and cheaters can’t profit.”

The case is In the Matter of Certain Carbon and Alloy Steel Products, 337-3144, U.S. International Trade Commission (Washington).

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