NEW YORK U.S. electrical steel producers "have been shut out" of China by anti-dumping and countervailing duties imposed by the Chinese government, according to AK Steel Corp. executive vice president and general counsel David Horn.
Horn spoke to the Congressional-Executive Commission on China at a Jan. 15 hearing in Washington to address Chinas compliance with World Trade Organization (WTO) regulations, which the United States has challenged.
U.S. Trade Representative Michael Froman said recently that the government has "requested consultations with China on its failure to bring anti-dumping and countervailing duties on U.S. exports of grain-oriented flat-rolled electrical steel (GOES) into compliance with its WTO obligations." (amm.com, Jan. 14).
Horn said that duties imposed by China on GOES imports from West Chester, Ohio-based AK Steel and the other U.S. producer of the material, Pittsburgh-based Allegheny Technologies Inc. (ATI), have remained despite the WTOs findings that such practices "are not justified and never should have been imposed" and have greatly reduced the value of American GOES exports.
"Prior to the start of the investigation, U.S. GOES exports to China totaled $270 million annually," Horn told the commission. "Today, the value is well under $1 million."
"We are optimistic that once the duties are eliminated on electrical steel, that well be able to get back into China and do business there," Horn said. "But we are very concerned that it will be difficult for us to do business in China, given the importance that the Chinese government has placed on building its electrical steel industry and not wanting us to go in there and compete against it."
Horn recommends stronger enforcement of trade laws "to ensure theres no circumvention" of WTO rulings, as well as actions that would protect the domestic market from Chinese GOES imports.
"The only way to put pressure on China is if we can retaliate with tariffs that cost it business," Horn said.
Chinas Ministry of Commerce, meanwhile, said Jan. 14 that the Chinese government "respects the WTO ruling" and will act "in accordance with the relevant provisions of the WTO to deal with the subsequent issues."
In November, the U.S. International Trade Commission ruled in favor of anti-dumping and countervailing trade petitions brought by AK Steel and ATI against GOES imports from seven countries, including China (amm.com, Nov. 19).