Right on cue, U.S. steel producers have filed antidumping and anti-subsidy (countervailing duty) complaints against imports of high-quality steel pipe from China.
The core of the dumping and subsidization accusations is not new. It centers on alleged benefits China’s steel producers derive from a legacy of state ownership and aid, as well as their willingness to continue exporting surplus product that cannot be absorbed into the domestic market. But until recently the industry was hampered in bringing a case because of high levels of profitability.
To succeed, the petitioner for antidumping relief must prove (1) that goods have been dumped at below the cost of production, the selling price in the home country or in comparable third countries; and (2) that the dumping caused or threatened “material injury” to producers of the “like product” in the United States.
Because steel producers had been making record profits until last summer, it would have been impossible to prove “material injury.” But industry lawyers believe six months of lower prices will be enough to convince officials the industry is suffering real hardship.