WARREN - A Warren steel company won a preliminary victory Monday when the U.S. Department of Commerce ordered that temporary duties be added to imported flat-rolled steel products the company alleges are being illegally dumped in the U.S.
Tuesday, the U.S. Department of Commerce announced it has issued a preliminary determination and set duties to level the playing field among Japanese and U.S. producer Thomas Steel Strip in Warren. The ruling will require Japanese companies to begin posting bond or cash deposits equal to the amount of the dumping margins, or approximately 48 percent to 78 percent of the value of the imported goods.
"Dumping" means that foreign companies are selling products in the United States at less than fair value in order to undercut U.S. producers. Often, the foreign companies are subsidized by their governments, making it difficult or impossible for domestic companies to compete.
The investigation, under way since April, originated with a complaint filed March 27 by Thomas Steel Strip on Warren's west side indicating that imports of diffusion-annealed, nickel-plated flat-rolled steel had caused the company to lose significant business, including a "crippling lost sale" last year that cost the company business in making steel used to manufacture AA alkaline batteries.
Thomas is the only remaining domestic producer of a specialized nickel-plated steel used for alkaline batteries and automobile fuel lines.
Last year, more than $24 million in diffusion-annealed, nickel-plated flat-rolled steel products were imported from Japan, according to the U.S. Commerce Department.
"As a result of the preliminary affirmative determination, Commerce will instruct U.S. Customs and Border Protection to require cash deposits based on these preliminary rates," a fact sheet issued by the Department of Commerce indicated.
The bond and / or deposits will be maintained until the U.S. Department of Commerce and the U.S. International Trade Commission makes its final rulings, expected in the spring of next year. If those final rulings determine there was material injury to a U.S. industry and that it was caused by the unfair dumping of Japanese imports, the duties will remain or could be adjusted, U.S. Department of Commerce spokesman Tim Truman explained.
If investigators determine there was no material injury or illegal dumping, the deposits will be returned to the Japanese companies and trade will continue duty-free.
For now, bond or deposits are required to cover the dumping margins of about 78 percent for producer Nippon Steel and Sumitomo Metal Corp., and about 48 percent for Japanese producer Toyo Kohan Co. Ltd. and all others.
U.S. Senator Sherrod Brown, D-Ohio, expressed his satisfaction Tuesday with the preliminary ruling.
"This is good news for Thomas Steel and Mahoning Valley workers," Brown said. "This preliminary Commerce Department decision is an important step towards defending Ohio based companies from countries like Japan that use unfair and illegal trade practices.
''Trade enforcement is vital if we are going to make products and create jobs in the Valley, Ohio, and United States,'' he said.
In its initial 66-page federal petition, Thomas Steel Strip and its Washington attorneys produced evidence including ships' manifests, market intelligence and other research to accuse Japan of undercutting its shipments to customers. The company asked investigators to impose anti-dumping duties on Japanese imports of the specialty nickel-plated steel.
In the federal documents, Thomas Steel Strip argued that lost market share to Japanese producers suppressing domestic producer prices has led to company operations falling from profits in 2010 to losses in 2012. Specific figures were not released publicly.
A company official in Warren referred questions to an overseas spokesman, who didn't immediately respond to a message seeking comment.
The specialty steel, known as diffusion-annealed, nickel-plated flat-rolled steel, is widely used in the manufacture of battery cans and end-caps for alkaline and lithium batteries. These products also may be used in applications such as automotive fuel lines, exhaust pipes, mufflers, magnetic inner shields for computers, and appliances.