Higher costs for some steel on the way?

Keep your eyes open for news that the U.S. International Trade Commission (ITC) has decided imports of various Chinese steel products have injured U.S. steel manufacturers because those Chinese products are either sold in the U.S. at below cost or are subsidized by the Chinese government.

The ITC will make those decisions in two separate cases, one decision expected in late June and the other in July. The ITC will be acting after the Commerce Department in late May concluded two separate investigations that resulted in the recommendation of huge antidumping and countervailing duties for two separate categories of Chinese steel imports. In each instance, the recommendation was for duties above 200 percent. The Commerce Department also recommended considerably small duties on Japanese, Italian, and Indian steel imports.

Officials cited two product categories in their recommendations: cold-rolled steel products, which may or may not be annealed, painted, varnished, or coated with plastics or other nonmetallic substances, and flat-rolled steel products, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel-, or iron-based alloys, which may or may not be corrugated or painted, varnished, laminated, or coated with plastics or other non-metallic substances in addition to the metallic coating.

Daniel Pearson, formerly chairman of the U.S. ITC and now a senior fellow in trade policy studies at the Cato Institute, argued that while China is believed to have in excess of 1,200 million metric tons of steel capacity and its excesses are bedeviling steel producers around the world, the U.S. has already imposed 149 antidumping and countervailing duties, and those obviously haven’t returned the U.S. steel industry to health.

“So it’s folly to think that a handful more would make any difference,” he said. Pearson added that the ITC should have to do a cost-benefit analysis of any decision that targets steel imports destined for the U.S. market. The goal would be to see if higher tariffs do more damage than good in terms of their impact on U.S. manufacturers who buy foreign steel.