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Cases & Deals

January 5, 2016

ITC Votes to Continue Orders on Unfair Trade of Magnesia Carbon Bricks from China and Mexico

WASHINGTON, Jan. 5, 2016 – King & Spalding today confirmed that the U.S. International Trade Commission (“ITC”) voted 6-0 to continue the antidumping duty orders on imports of Magnesia Carbon Bricks (“MCBs”) from China and Mexico and the countervailing duty order on imports of MCBs from China.  As a result, dumping and countervailing duties will continue to apply to imports of MCBs from China and dumping duties will continue to apply to imports of MCBs from Mexico.

“We are pleased that the Commission has reached a unanimous, affirmative determination and that the orders will be continued for another five years,” stated Michael Taylor, a partner at King & Spalding and counsel for the Magnesia Carbon Bricks Fair Trade Committee, an ad hoc association comprised of several U.S. producers of MCBs.  “We also are appreciative of the hard work undertaken by the International Trade Commission and the Department of Commerce in this review.  The evidence was clear in this case that revocation would lead to increased imports at unfairly low prices.”

The ITC’s determination was made in the first five-year (“sunset”) review of the orders.  Specifically, the ITC determined that revoking the antidumping duty and countervailing duty orders would be likely to lead to the continuation or recurrence of material injury within a reasonably foreseeable time.  The ITC’s affirmative vote follows a decision by the U.S. Department of Commerce that imports of MCBs from China and Mexico would likely be sold at unfair prices, i.e. dumped, if the antidumping orders were revoked, and that imports from China would be unfairly subsidized if the countervailing duty order were revoked.

The orders on MCBs from China and Mexico originally were imposed in 2010 after the ITC found that from 2007 to 2009, imports from China and Mexico increased significantly, undercut the prices of the U.S. producers, and suppressed the prices of U.S. producers to a significant degree.  The unfairly low prices of the imports caused the profitability and performance of the domestic industry to decline during 2007-2009, both when U.S. demand for MCBs increased from 2007 to 2008 and when demand decreased from 2008 to 2009.  As a result, the ITC determined that the domestic industry was materially injured by reason of imports from China and Mexico.

After the orders were imposed, imports from both countries declined and the condition of the domestic industry improved.  In the sunset review, the ITC determined that the injurious state of the industry prior to imposition of the orders would be likely to recur if the orders were revoked, and the Commerce Department found that dumping and countervailable subsidization would be likely if the orders were revoked.

Antidumping duties and countervailing duties are imposed to ensure that foreign producers do not enjoy an unfair price advantage to the detriment of U.S. firms and U.S. workers.  U.S. importers must pay antidumping duties to offset any unfair price advantage and countervailing duties to offset the benefits of any government subsidies.  These U.S. trade laws are consistent with the rules of the World Trade Organization, which have been agreed to by all 162 members of the WTO.

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