Questions About Circumvention Suits: Do They Have a Chance?

Steel Market Update spoke with two sources regarding the most recent complaint filed by the domestic mills against Vietnam and China for circumvention of duties (China) on cold rolled and CORE (corrosion resistant steels such as galvanized and Galvalume) products. One of the tenants behind the accusations made by the domestic steel mills is the toll processing (transformation) of the steel substrate in Vietnam. It has long been held that taking hot rolled substrate and cold rolling the steel was enough of a transformation to change the country of origin. The same goes for taking hot rolled or cold rolled steels and coating them with zinc (galvanized) or zinc/aluminum (Galvalume). When the CORE products are exported they are considered to have changed the origin of the country.

Daniel Pearson of the Cato Institute and a former president of the International Trade Commission provided SMU with the WTO definition of substantial transformation i.e. what it takes in order to change the country of origin: