The US Department of Commerce said on Thursday that it would launch an investigation into allegations that steel nail exporters in Taiwan and six other countries dumped products in the US market and benefited from unfair subsidies.
COMPLAINT
The investigation was prompted by a complaint filed by US-based Mid Continent Steel & Wire Inc. with the department and the US International Trade Commission (ITC) late last month accusing Taiwan, India, South Korea, Malaysia, Oman, Turkey and Vietnam of selling steel nails at unfairly low prices.
SUBSIDIES
Mid Continent Steel also complained that nail exporters in the seven countries received subsidies from their governments through tax breaks or other means, causing unfair competition.
The US imposes anti-dumping duties against companies found selling, or dumping, their products in the US below market value, and countervailing duties are imposed to offset “unfair subsidization” of products sold to the US market.
INVESTIGATION
Countervailing duty investigations by the US against Taiwan have been fairly rare, with none occurring from 1987 to 2012.
Last year, the Commerce Department and the ITC conducted countervailing duty probes into Taiwanese steel makers that export non-oriented electrical steel (NOES), which are largely used in machine tools and electricity generators, to the US market.
Following the NOES investigation, the Commerce Department issued a preliminary ruling in March in which it imposed a countervailing duty of 12.82 percent against Leicong Industrial Co (麗鋼工業) and a 6.41 percent duty against other Taiwanese NOES exporters.
As for the steel nail complaint, the Commerce Department said Mid Continent Steel has requested a 78.17 percent anti-dumping duty against Taiwanese steel nail exporters but did not specify what the suspected subsidy rate was.
RULING
The Commerce Department said that if the ITC rules on July 14 that the steel nail exporters from the seven countries imposed material injury to the US industry, the department will issue a preliminary countervailing duty ruling on Aug. 22 and another preliminary ruling on anti-dumping duties on Nov. 5.
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