By Daniel Pickard and Jacob A. Garten, Buchanan, Ingersoll & Rooney
According to the U.S. Department of Commerce, the United States imported over $15 billion worth of oil and gas related equipment in 2022 and – not surprisingly – trade remedy cases in this portion of the energy sector have remained active. Specifically, in the last quarter of 2022 antidumping and/or countervailing orders were issued on oil country tubular goods (OCTG) from South Korea, Russia, Argentina and Mexico. In addition, there have been several other developments during the first half of 2023 that impact the oil and gas equipment portion of the energy sector.
In March, Commerce published the final results of the 2020-2021 administrative review of the AD order on OCTG from the Ukraine and calculated a dumping margin of 1.55% for Interpipe’s affiliated companies. The 1.55% dumping margin represented a very large drop from the previous review, where the weighted average dumping margin for the same collective entity was 27.8%.
In June, the Court of International Trade (CIT) remanded the 2019-2020 AD administrative review of OCTG from Korea on certain issues, which notably included the weighted average dumping margin applicable to non-examined companies, and upheld Commerce’s other contested determinations in Hyundai Steel v. United States.
June also saw the preliminary results in the large diameter welded pipe from South Korea CVD administrative review with preliminary estimated subsidies that ranged from de minimis to 1.54%. The preliminary results in the companion AD large diameter welded pipe from South Korea were released in May with preliminary dumping margins of zero to 6.17%. The final results of circular welded non-alloy steel pipe from South Korea AD review were also released in June with dumping margins that ranged from 0.00% to 12.87%.
Commerce also issued a preliminary affirmative circumvention determination in the AD order on certain circular welded non-alloy steel pipe (CWP) from South Korea. This circumvention inquiry involved imports of CWP that were completed in Vietnam using hot-rolled steel produced in South Korea and contains an extensive certification scheme for CWP from Vietnam, that involved CWP produced in Vietnam and AD/CVD orders on CWP from China, India and Korea. The orders referenced in the certification scheme could result in duties on CWP produced in Vietnam from 4.80% to 124.56% depending on which of the orders were implicated by the specific certification or lack of certification. This certification scheme may be changed in the final determination, as well as the affirmative determination of circumvention itself.
In March, the Court of Appeals for the Federal Circuit issued an important decision in regard to Section 232 duties imposed under Proclamation 9705 in a case involving circular welded carbon steel pipes and tubes from Turkey in an antidumping case. The issue was whether Commerce should subtract duties paid for imports covered by the Proclamation in order to determine dumping margins. Subtracting the duties paid on imports covered by the Proclamation would serve to raise the dumping margins on affected products. The Court of Appeals held in Burusan Mannesmann Boru Sanayi ve Ticaret A.S. v. United States that Commerce was correct to subtract these duties from U.S. prices, raising the resulting dumping margins.
The renewable energy equipment portion of the energy sector has also been active. Commerce issued final results for administrative reviews in two of the utility scale wind towers AD cases during the first half of this year. For the 2020-2021 AD review of South Korean wind towers, Commerce assigned Dongkuk S&C Co., Ltd, the only reviewed company, an antidumping margin of 2.49%. The cash deposit rate for all other producers and exporters that have not yet been individually examined, remains 5.41%. For the 2020-2021 AD administrative review of Indonesia wind towers, Commerce assigned the only company examined, PT. Kenertec Power System, an antidumping duty margin of 2.03%. In April, the CIT sustained Commerce’s final results of redetermination in the CVD investigation of utility scale wind towers from Vietnam. This decision left in place the CVD rates calculated in the Commerce’s final determination for its CVD investigation of wind towers from Vietnam, which were 2.84% for CS Wind Vietnam Co., Ltd. and all other Vietnamese producers and exporters.
Commerce also recently issued the final results of redetermination pursuant to the CIT’s remand of the AD investigation of utility scale wind towers from Spain. In the investigation, Commerce assigned a 73.00% dumping margin to Siemens Gamesa (SGRE), among other companies. The CIT remanded Commerce’s decision not to individually examine SGRE. On remand, during its individual investigation of SGRE Commerce found it to be affiliated with a non-responsive producer and exporter, Windar Renovables S.A., to which it had assigned the 73.00% dumping margin as adverse facts available. On remand, Commerce determined that it was appropriate to treat SGRE, Windar Renovables, S.A. and certain other companies as a single entity and assigned the single entity the 73.00% dumping margin as adverse facts available based on Windar Renovables, S.A.’s failure to cooperate. The remand results will now go to the CIT for review.
The conventional wisdom is that trade remedy proceedings are counter-cyclical – meaning that more trade cases are filed during recessionary periods. If this historical trend continues, and assuming that concerns regarding a slowing of the U.S. economy remain, then it is likely that new antidumping petitions will be filed in the second half of 2023 and perhaps into the beginning of 2024.
Energy Workforce Member Buchanan, Ingersoll & Rooney provides insights on international trade issues specific to energy services and technology companies. Daniel Pickard is Chair, International Trade & National Security Practice Group, and Jacob A. Garten is Section Specialist, International Trade & National Security Practice Group.