Anti-antidumping
The United States is executing circumvention investigations again. A circumvention investigation determines whether a country or company changed the production and shipment methods for a product that the United States has imposed antidumping and countervailing duties on. While the United States is trying to keep China in check, voices have been raised that Korean companies should be careful about using Chinese materials and parts when exporting to the United States.
According to a report on the surge in U.S. circumvention investigations and Korean companies’ countermeasures released by the Korea International Trade Association on May 18, U.S. authorities launched 26 new circumvention investigations last year, the highest number ever.
By target country, China topped the list with 17 cases. Taiwan, Korea, and India also received three investigations each, an increase from the past. Three circumvention investigations were initiated against Korean steel products exported to the United States via Vietnam.
On top of that, Korea has been named as a transit country in one of the 17 circumvention investigations against China, so related facts should be found out. This is the first time Korea has been named as a transit country for allegedly evading anti-dumping measures on Chinese aluminum foil.
Of the 26 circumvention investigations initiated by the United States last year, 22 involved this type of third-country assembly and completion. Compared to previous years, third-country circumvention investigations are being strengthened. The United States has increased the number of circumvention investigations because it believes China is bypassing ASEAN countries to evade U.S. antidumping and countervailing duty measures. The European Union (EU) and Australia, two of the most frequent circumvention investigating countries alongside the United States, launched only two and one new investigations in 2022, respectively.
The report attributed the increase in circumvention investigations to the strengthening of a steel and aluminum monitoring system and the revision of regulations related to circumvention investigations amid a U.S.-China conflict. The United States tracks supply chains by requiring steel importers to report the countries of steelmaking and aluminum importers to report the countries of smelting and casting and by inferring third-country circumvention and transshipment. A final affirmative determination in the circumvention investigations may result in the extension of high rate antidumping and countervailing duty measures imposed on China to Korea’s exports to the United States.