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US imposes duties on steel wire rod of Russian manufacturers
The United States continues a policy of barriers and duties, which gained momentum after Donald Trump came to power . This time, the attention of the US Ministry of Trade was drawn to a steel wire rod - a wire of hydrocarbon steel with a diameter of 5-10 mm.
The agency issued a statement that wire rod manufacturers from the United Arab Emirates, Belarus and Russia are seriously dumping in the US market and thereby create non-competitive conditions for local enterprises.
The Ministry of Commerce claims that during the study it was found out that exporting companies from these countries sold wire rod in the USA in the range from 84.10% to 756.93% lower than its real value.
“In the United States since the 90s there has been a powerful“ steel ”lobby, which spends a lot of time and money to convince the congress and public opinion of the country that their own metallurgical production is experiencing an acute crisis due to the influx of cheap imported products. So it was with hot rolled steel, and now it continues with cold rolled, ”comments Dmitry Zharsky, director of the VETA expert group.
In order to protect their manufacturers, the American department suggests that the US Customs and Border Guard Service introduce additional duties on this type of product for these countries.
So, according to the ministry, the anti-dumping duty for wire rod manufacturers from the UAE will be 84.1%, for imports from Belarus - 280.02%, for Russian producers it is proposed to set the bar from 436.8% to 756.93%.
It is emphasized that separately for the Abinsk Electrometallurgical Plant and the Novolipetsk Metallurgical Combine, the duty will be set at 756.93%. For other Russian manufacturers, the rate will be 436.8%. The materials noted that when determining the size of the rate, the US agency was based on its own data, since wire rod suppliers did not provide the requested information.
“The United States has a significant handicap in the imposition of duties, a kind of moral permission that will allow the law to be passed faster: a whole package of economic sanctions has already been introduced against Russia and Russian enterprises,” Zharsky suggests.
In the past, it would have been possible to discuss simply a fine or quotas for products, but now we are talking immediately about protective duties - this means that the trade war has already entered an acute phase.
The final decision on this issue should be made by the US Commission on International Trade: it must establish whether the actions of these manufacturers really harmed the American economy or there is a danger of causing such harm.
The commission is expected to make its decision on January 5. In this case, the requirements for the payment of fees will enter into force on January 12.
The United States “is committed to free, fair and mutually beneficial trade with these countries, in this case, the decision was made solely on the basis of a full and fair assessment of the facts,” the press service quoted the head of the US Department of Industry Wilbur Ross.
According to the calculations of the US authorities themselves, in 2016, wire rod was supplied from Russia for $ 32.3 million, from Belarus - to $ 10.4 million, from the UAE - to $ 7 million.
“ NLMK did not take part in this investigation, since the US market is not significant for the supply of wire rod from the Group’s enterprises,” NLMK’s press service noted to Gazeta.ru. “Fees will not affect company sales.”
As for Russian producers of wire rod, such measures will lead to their losses, but they will not become critical for the industry, said Roman Alekhine , founder of the marketing group Alekhine and Partners.
However, according to Zharsky , domestic producers of wire rod may ask the government for support for a while until new sales markets are lobbied.
The initiators of the investigation into the import of wire rod from the Russian Federation, Belarus and the UAE to the United States were Gerdau Ameristeel US, Nucor Corporation, Keystone Consolidated Industries and Charter Steel.
Earlier, the US Department of Commerce previously recognized the fact of dumping when importing wire rod from carbon and alloy steel from Ukraine, Italy, South Korea, South Africa, Spain, Turkey and the UK. So, for example, preliminary duties on products of ArcelorMittal Kryvyi Rih and Yenakievo steel plant (part of Metinvest) were designated at 44.03%, against other Ukrainian manufacturers - 34.98%. However,
Steel wire rod is far from the first example of the protectionist policies of the United States. President Donald Trump has consistently defended the interests of American manufacturers.
Since its inauguration, the Ministry of Trade has introduced about 77 anti-dumping and countervailing duties on different groups of goods.
One of the most high-profile cases was the story of duties on the S-series aircraft of the Canadian manufacturer Bombardier. The fault was a major contract with the airline Delta Air Lines, which Bombardier literally intercepted from Boeing in 2016 , offering the airline its aircraft at a record low price of $ 19.6 million per vessel.
At the same time, the catalog price of the Boeing 737-700 model competing with CSeries is $ 83.4 million, and the cost of production of such an aircraft, according to Boeing itself, is at least $ 33.2 million. After the Boeing appeal and the investigation, the countervailing duties established countervailing duties on the company's aircraft Bombardier in the amount of 219.63%.
Earlier, experts from the World Bank and the Heritage and Global Trade Alert funds conducted a study according to which leading world economies are increasingly using protectionist laws and barrage measures to protect their producers. So, in the legislation of the USA and the EU, more than 1000 such laws were revealed, in India - about 400. According to experts, trade restrictions cost the world economy $ 400 billion.