New Trade Case on Steel Racks from China

By Mark R. Ludwikowski / Jul 02, 2018

A new US antidumping (AD) and countervailing duty (CVD) case was filed on June 20, 2018 by the Coalition for Fair Rack Imports against imports of Certain Quartz Surface Products from China. The case targets numerous US importers and Chinese suppliers of this product which is commonly used in facilities such as warehouses, fulfillment and distribution centers, big-box retail stores, and manufacturing facilities.

The Department of Commerce (DOC) and the International Trade Commission (ITC) will next determine whether to launch AD and/or CVD duty and injury investigations, respectively, on these products. Commerce will be responsible for calculating the ultimate AD/CVD margins on the imports, while the ITC will conduct a concurrent investigation to determine if the imports are injuring the U.S. industry. If Commerce finds dumping or unfair subsidization in its preliminary determinations, currently scheduled for September 13, 2018 (CVD) and November 27, 2018 (AD), importers will be charged the calculated duties upon the products’ entry in the U.S. market.

There are strict statutory deadlines associated with these proceedings and affected companies are advised to prepare as soon as possible. If this product is of interest to you, please let us know  so that we can provide you with additional information as it becomes available.

The following are key facts about this trade case:

Petitioners: The Coalition for Fair Rack imports includes the following petitioning companies: Bulldog Rack Company, Hannibal Industries, Inc., Husky Rack and Wire, Ridg-U-Rak, Inc., SpaceRAK, Speedrack Products Group, Ltd., Steel King Industries, Inc., Tri-Boro Shelving & Partition Corp. and UNARCO Material Handling, Inc.

Foreign Producers/Exporters and US Importers:  Please contact us for a listing of individual companies named in the petition.

Alleged AD and CVD margins:  Petitioner has alleged AD margins of 131.1% to 145.7% and CVD margins above de minimis.

Merchandise covered by the scope of the case: The merchandise covered by this investigation is steel racks and parts thereof, assembled or unassembled. Steel racks are racks made of steel of dimensions and configurations that can be adjusted as required, with or without locking tabs or slots, and with or without bolted, clamped, or welded connections, including any of the following: uprights, posts, columns, braces, frames, beams, arms, locking devices and rails.

A steel rack is a structure typically made from cold-formed or hot-rolled steel structural members and includes, but is not limited to, components such as plates, rods, angles, shapes, sections and tubes. Welding, bolting and clipping are the typical methods of assembly. Connections may also be made with locking devices such as clips, end plates and beam connectors. Steel racks may be made to ANSI MH16.1 or ANSI MH16.3 standards. All steel racks and parts thereof meeting the physical description set out herein are covered by the scope of this investigation, whether or not produced according to a particular standard.

The vertical components of steel racks may be referred to as uprights, posts or columns, and may be connected with horizontal or diagonal braces to form upright frames. A typical storage configuration comprises upright frames perpendicular to the aisles that are independently adjustable, with positive-locking beams parallel to the aisle and spanning between the upright frames, and braces designed to support unit loads between the beams. A cantilever rack consists of uprights running parallel to the aisle and cantilever beams or arms connected to the uprights and running perpendicular to the aisle rather than spanning two upright frames.

The scope includes all steel racks and parts thereof meeting the description above, regardless of: (1) dimensions, weight, strength, gauge or load rating; (2) vertical upright or frame type (including structural, roll-form or other); (3) horizontal support or beam/brace type (including but not limited to structural, roll-form, slotted, unslotted, Z-beam, C-beam, L-beam, step beam, cantilever beam, and cargo rack); (4) number of supports; (5) number of levels; (6) surface coating, if any (including but not limited to paint, epoxy, powder coating, zinc or other metallic coatings); (7) shape (including but not limited to rectangular, square, corner and cantilever); (8) the method by which the vertical and horizontal supports connect (including but not limited to locking tabs or slots, bolting, clamping and welding); and (9) the inclusion or not of moving components (including but not limited to rails, wheels, rollers, tracks, channels, carts and conveyors).

Steel racks may be referred to as pallet racks, storage racks, stacker racks, retail racks, pick modules, selective racks or cantilever racks. Steel racks that incorporate moving components may also be referred to as pallet-flow racks, carton-flow racks, push-back racks, movable-shelf racks, drive-in racks and drive-through racks.

Subject merchandise includes material matching the above description that has been finished, assembled or packaged in a third country, including by coating, painting, assembling, attaching to, or packaging with another product, or any other finishing, assembly or packaging operation that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the steel racks and parts thereof.

Steel racks and parts thereof are also included in the scope of this investigation whether or not imported attached to, or in conjunction with, other parts and accessories such as wire decking, nuts and bolts. If steel racks and parts thereof are imported attached to, or in conjunction with, such non-subject merchandise, only the steel racks and parts thereof are included in the scope.

Specifically excluded from the scope of this investigation are any products covered by Commerce’s existing antidumping and countervailing duty orders on boltless steel shelving units prepackaged for sale from the People’s Republic of China. See Boltless Steel Shelving Units Prepackaged for Sale From the People’s Republic of China: Antidumping Duty Order, 80 Fed. Reg. 63,741 (October 21, 2017); Boltless Steel Shelving Units Prepackaged for Sale From the People’s Republic of China: Amended Final Affirmative Countervailing Duty Determination and Countervailing Duty Order, 80 Fed. Reg. 63,745 (October 21, 2017).

Merchandise covered by this investigation is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under the following subheadings: 7326.90.8688 and 9403.20.0080. Subject merchandise may also enter under subheadings 7308.90.3000, 7308.90.6000, 7308.90.9590 and 9403.20.0090. The HTSUS subheadings set forth above are provided for convenience and U.S. Customs purposes only. The written description of the scope is dispositive.

If you have any questions regarding the content of this alert, please contact Mark Ludwikowski (mludwikowski@clarkhill.com; 202-640-6680) or another member of Clark Hill's International Trade Practice Group.