The vehicle for doing so is the US Commerce Department’s Steel Import Monitoring and Analysis (SIMA) system
Commerce plans to revamp how the US records steel imports to require that the data specify not only where finished steel product - such as coated flat-rolled steel or oil country tubular goods (OCTG) - come from but also where the substrate used to make the products originates.
“These significant improvements to SIMA will enable Commerce and the public to more readily identify transshipment and circumvention involving steel imports,” US Commerce Secretary Wilbur Ross said in a statement
on Friday September 11.
The new rules go into effect on October 13, according to a Federal Register entry
also dated Friday.
Melted-and-poured goes global
In practice, the revamped SIMA system will require those seeking a license to import steel into the US to fill in a new field for “the country of melt and pour,” according to the Federal Register.
Commerce’s SIMA system had previously only required that the origin of the finished steel product be disclosed.
The rules are aimed at better identifying trade patterns and spotlighting “surges” of steel flowing into the US, in addition to highlighting instances of potential evasion or circumvention of anti-dumping or countervailing duty orders, Commerce said.
Some products - cold-rolled and coated flat-rolled steel, for example - are produced using hot-rolled coil melted and poured in one nation and then shipped to another nation for downstream processing.
The issue became a flash point in a series of duty-circumvention cases. The initial ones were filed in October 2016 and targeted flat-rolled steel that was melted and poured in China but cold-rolled or coated in Vietnam.
Under existing SIMA rules, such cold-rolled or coated product would have been listed as originating in Vietnam even though the substrate was made in China, a nation already subject to prohibitively high anti-dumping and countervailing duty orders.
The US also pushed for melted-and-poured rules in the US-Mexico-Canada Agreement (USMCA), the replacement to the North American Free Trade Agreement (Nafta).
USMCA requires 70% of a vehicle’s steel and aluminium to originate in North America, meaning the material must be melted and poured on the continent.
Melted-and-poured language championed by the US steel industry has long been in place in government-backed infrastructure work due to “Buy America” laws.
The scope and timeline
The new rules will also “harmonize” the scope of steel products subject to the new SIMA licensing requirements to match those subject to Section 232 tariffs and quotas, Commerce said.
Section 232 - introduced in 2018 - means steel imported from most nations is subject to a 25% US tariff. Some nations, such as Brazil and South Korea, agreed to a quota
in lieu of the tariff.
The novel regulations will also “extend the SIMA system indefinitely” by getting rid of certain regulatory provisions concerning its duration, according the Federal Register.
The program, in existence in its current form since 2005, provides statistical data on steel imports five weeks earlier than it otherwise would be available from the US Census Bureau. In 2017, its duration was extended through March 2022. The system has not been significantly updated since 2005, Commerce said.
All import licenses must meet the requirements of the new SIMA system when it is operational on October 13. Licenses requested until October 9 should instead meet the requirements of the existing system, according to the Federal Register.
The SIMA system will be offline from October 10-12 while the legacy system is discontinued and the new system started up.
Commerce said it plans to hold education webinars on the new system on a first-come, first serve basis.