U.S. Secretary of Commerce Wilbur Ross has announced the initiation of new antidumping duty (AD) and countervailing duty (CVD) investigations to determine whether imports of titanium sponge from Japan and Kazakhstan are being unfairly dumped in the United States, and whether producers in Kazakhstan are receiving alleged unfair subsidies.

“The Department of Commerce intends to act swiftly to halt any unfair trade practices and will render our decisions at the earliest opportunity, while also assuring a full and fair assessment of the facts,” said Secretary Ross. “The U.S. market is the most open in the world, but we must take action to ensure U.S. businesses and workers are treated fairly.”

These AD and CVD investigations were initiated based on petitions filed by Titanium Metals Corporation (a.k.a., TIMET) (PA) on August 24, 2017. The estimated dumping margins alleged by the petitioner range from 66.69 percent to 95.2 percent for Japan and 42.22 percent for Kazakhstan, and the unfair subsidies are estimated to be above de minimis, that is, one percent or greater for Kazakhstan.

In the AD investigation, the Commerce Department will determine whether imports of titanium sponge from Japan and Kazakhstan are being sold in the U.S. market at less than fair value.

In the CVD investigation, the Commerce Department will determine whether Kazakhstan producers of titanium sponge are receiving countervailable government subsidies.

If the Commerce Department determines that titanium sponge from Japan and Kazakhstan are being dumped into the U.S. market and Kazakhstan is receiving unfair government subsidies, and if the U.S. International Trade Commission (ITC) determines that dumped and/or unfairly subsidized U.S. imports of titanium sponge from Japan and/or Kazakhstan are causing injury to the U.S. industry, the Commerce Department will impose duties on those imports in the amount of dumping and/or unfair subsidization found to exist.

From January 20, 2017, through September 14, the Commerce Department has initiated 65 AD and CVD investigations – a 48 percent increase over the previous year. The Commerce Department currently maintains 411 AD and CVD duty orders which provide relief to American companies and industries impacted by unfair trade. For this same period in 2016, Commerce initiated 44 AD and CVD investigations.

In 2016, imports of titanium sponge from Japan and Kazakhstan were valued at an estimated $144.8 million and $374 thousand, respectively.

Click HERE for a fact sheet on these initiations.

Next Steps:

During the Commerce Department’s investigations into whether titanium sponge is being dumped and/or unfairly subsidized, the ITC will conduct its own investigations into whether the U.S. industry and its workforce are being harmed by such imports. The ITC will make its preliminary determinations on or before October 10. If the ITC preliminarily determines that there is injury or threat of injury, then the Commerce Department investigations will continue, with a preliminary CVD determination scheduled for November 2017 and preliminary AD determinations scheduled for January 2018, unless these deadlines are extended.

If the Commerce Department preliminarily determines that dumping or unfair subsidization is occurring, then it will instruct U.S. Customs and Border Protection to start collecting cash deposits from all U.S. companies importing the subject titanium sponge from Japan and Kazakhstan.

Final determinations by the Commerce Department in these cases are scheduled for January 2018 for the CVD investigation, and April 2018 for the AD investigation, but those dates may be extended. If either the Commerce Department finds that products are not being dumped or unfairly subsidized, or the ITC finds in its final determinations there is no harm to the U.S. industry, then the investigations will be terminated and no duties will be applied.

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Foreign companies that price their products in the U.S. market below the cost of production or below prices in their home markets are subject to “antidumping duties.” Companies that receive unfair subsidies from their governments, such as grants, loans, equity infusions, tax breaks and production inputs, are subject to “countervailing duties” aimed at directly countering those subsidies.