US AD and CVD Line Pipe Petitions Lead to Growing Concerns from Korean Exporters
The Department of Commerce announced on Nov. 6, 2014 the beginning of an antidumping duty (AD) and countervailing duty (CVD) investigations into welded API (American Petroleum Institute) line pipe that has been imported to the United States from the republic of Korea and the Republic of Turkey. Exporters from Korea are feeling uneasy about the petition, filed by several United States steel mills, warning that the actions being taken against Korea and Turkey could prevent any more products from being exported from those countries.
Dumping, which is described as a foreign business selling a product in America for much less than it is actually worth, can have negative effects on the industry. Countervailing duties are imposed to counteract any of the negative effects of receiving financial assistance, also known as subsidiaries, from governments of foreign countries. The AD and CVD laws were established in order to in order to prevent the market from becoming distorted, leveling the playing field for competition across the globe.
The specific product that is under investigation by the Department of Commerce is circular welded carbon and alloy steel pipes that are 24 inches or under in outsider diameter. The thickness, length, finishes and stenciling of the pipe is not related to the investigation. While the majority of this pipe meets API guidelines, pipe that is equivalent to those standards in foreign countries is also included in the investigation being conducted.
Seven producers of welded pipe line from the United States filed the petition and include: America Cast Iron Pipe Company, Energex, Maverick Tube Corporation, Northwest Pipe Company, Stupp Corporation, Tex-Tube Company, TMK IPSCO, and Welspun Tubular, LLC. These companies claimed in the petition that Korea is producing dumping margins 58.83 – 221.54% and Turley is producing margins of 16%. The Korean International Trade Association (KITA) believes that South Korean steel manufacturing companies are being targeted with the initiation of these investigations.
“The US petitioners cited export financial support arrangements and short-term loans provided by the Export-Import Bank of Korea and the Korea Development Bank as unfair subsidies and demanded the US government slap countervailing duties on South Korean-made pipes,” representatives from KITA said.