SG 2021 ER: Steel grating
Statement of Reasons—expiry review determination

Decision

Ottawa, September 9, 2021

On August 26, 2021, pursuant to paragraph 76.03(7)(a) of the Special Import Measures Act, the Canada Border Services Agency determined that the expiry of the order made by the Canadian International Trade Tribunal on April 18, 2016, in Expiry Review No. RR-2015-001:

1. is likely to result in the continuation or resumption of dumping of certain steel grating originating in or exported from China and
2. is likely to result in the continuation or resumption of subsidizing of certain steel grating originating in or exported from China

Executive summary

[1] On March 29, 2021, the Canadian International Trade Tribunal (CITT), pursuant to subsection 76.03(3) of the Special Import Measures Act (SIMA), initiated an expiry review of its order made on April 18, 2016, in Expiry Review No. RR-2015-001, concerning the dumping and subsidizing of certain steel grating originating in or exported from China.

[2] As a result of the CITT’s notice, on March 30, 2021, the Canada Border Services Agency (CBSA) initiated an expiry review investigation to determine, pursuant to paragraph 76.03(7)(a) of SIMA, whether the expiry of the order is likely to result in the continuation or resumption of dumping and/or subsidizing of the subject goods.

[3] The CBSA received responses to its Canadian Producer Expiry Review Questionnaire (ERQ) from Borden Metal Products (Canada) Ltd. (Borden Gratings)^{Footnote 1} and Fisher & Ludlow Ltd. (Fisher & Ludlow)^{Footnote 2}, major producers of steel grating in Canada. The submissions made by Borden Gratings and Fisher & Ludlow included information supporting their position that continued or resumed dumping and subsidizing of steel grating from China is likely if the CITT’s order is rescinded.

[4] The CBSA did not receive any responses to the Importer ERQ or the Exporter ERQ. The CBSA also did not receive a response to the Foreign Government ERQ from the Government of China (GOC).

[5] Fisher & Ludlow provided a case brief^{Footnote 3} to the CBSA in support of its position that continued or resumed dumping and subsidizing of steel grating from China is likely if the CITT’s order is rescinded. No other party provided a case brief to the CBSA and no party provided a reply submission in response to the Fisher & Ludlow case brief.

[6] Analysis of information on the administrative record indicates a likelihood of continued or resumed dumping into Canada of certain steel grating originating in or exported from China should the CITT’s order be rescinded. This analysis relied upon the following factors:

• continued dumping of certain steel grating while the CITT order was in effect and the inability of Chinese exporters to compete at non-dumped prices
• production capacity and export-orientation of steel grating producers in China
• decline of Canadian oil and gas, construction and manufacturing sectors leading to decreased demand for steel grating
• continued weakening in domestic demand for steel in China leading to an increasing reliance on export markets
• anti-dumping measures concerning Chinese steel grating in the United States and Turkey

[7] In addition, analysis of information on the administrative record indicates a likelihood of continued or resumed subsidizing of certain steel grating originating in or exported from China should the CITT’s order be rescinded. This analysis relied upon the following factors:

• continued subsidizing of steel grating while the order was in effect
• current countervailing measures concerning Chinese steel grating in the U.S. and other Chinese steel products in Canada

[8] For the forgoing reasons, the CBSA, having considered the relevant information on the record, determined on August 26, 2021, pursuant to paragraph 76.03(7)(a) of SIMA that the expiry of the order in respect of certain steel grating originating in or exported from China is likely to result in:

• the continuation or resumption of dumping of the goods into Canada and
• the continuation or resumption of subsidizing of the goods exported to Canada

Background

[9] On September 20, 2010, following a complaint filed by Fisher & Ludlow, the CBSA initiated an investigation regarding the dumping and subsidizing of metal bar grating of carbon, alloy or stainless steel originating in or exported from China. The complaint was supported by Borden Gratings.

[10] On March 21, 2011, the CBSA made final determinations of dumping and subsidizing concerning these goods.

[11] On April 19, 2011, the CITT issued an injury finding in Inquiry No. NQ-2010-002 respecting carbon steel bar grating and alloy steel bar grating from China. At that time, the CITT also found that the volume of dumped and subsidized stainless steel grating was negligible and terminated its inquiry regarding those goods.

[12] On July 14, 2015, the CBSA concluded a re-investigation to update the normal values, export prices, and amounts of subsidy of certain steel grating from China. Neither the exporters nor the GOC participated in the re-investigation. Imports of subject goods from all exporters are therefore subject to a ministerial specification pursuant to subsection 29(1) of SIMA, which specifies that the normal value shall be determined based on the export price plus an amount equal to 85% of that export price, resulting in anti-dumping duties equal to 85% of the export price. Imports of subject goods from all exporters are also subject to countervailing duties equal to 13,064 Renminbi per metric tonne, in accordance with the ministerial specification made under subsection 30.4(2) of SIMA.

[13] On June 23, 2015, the CITT issued a notice concerning the expiry of its finding, which was scheduled to occur on April 18, 2016. Based on the information filed during the expiry process, the CITT decided that a review of the finding was warranted. On August 12, 2015, pursuant to subsection 76.03(3) of SIMA, the CITT gave notice and initiated an expiry review of its finding made on April 19, 2011.

[14] On April 18, 2016, the CITT continued its finding in respect of the dumping and subsidizing of steel grating originating or exported from China.

[15] On February 5, 2021, the CITT issued a notice concerning the expiry of its order, which was scheduled to occur on April 17, 2021. Based on the information filed during the expiry process, the CITT decided that a review of the order was warranted. On March 29, 2021, pursuant to subsection 76.03(3) of SIMA, the CITT gave notice and initiated an expiry review of its order made on April 18, 2016.

[16] On March 30, 2021, the CBSA commenced an expiry review investigation to determine whether the expiry of the order is likely to result in continued or resumed dumping and/or subsidizing of the goods from China.

Product definition

[17] The goods subject to this expiry review investigation are defined as:

[18] The subject goods can be referred to as “metal bar grating”, “steel grating” or simply “bar grating”. The goods are sold in “panel” or “mat” form, produced as either standard bar grating or heavy-duty bar grating. Standard bar grating is manufactured in Canada according to American National Standards Institute (ANSI) and National Association of Architectural Metal Manufacturers (NAAMM) MBG 531 specifications with maximum bearing bar thickness of 3/16 inches (4.76 millimeters (mm)). Heavy duty bar grating is made according to ANSI/NAAMM MGB 532 specifications with maximum bearing bar thickness of 3/8 inches (9.53 mm).

[19] The “mats” or “panels” are typically made in standardized sizes and the most common panel size is 3 feet (.91 meters) wide by 24 feet (7.32 meters) long. In accordance with the ANSI/NAAMM specifications referred to, the size of the bearing bars usually ranges from 1/8”(3.18 mm) thickness and 3/4”(19.05 mm) in depth (width) to 3/8”(9.53 mm) thickness and 5”(127 mm) in depth (width), depending on the load requirements.

[20] In addition to ANSI/NAAMM specifications, the subject goods may be produced to other recognized standards, such as Chinese, U.K. and Australian specifications.

[21] The subject goods may be imported and sold even if not made or certified to the ANSI/NAAMM or other recognized standards. Non-certified product includes secondary material or other kinds of “non-spec” grating. These goods lack the requisite mill tests or other proof of compliance with international standards.

[22] The subject goods do not include: (1) expanded metal grating comprised of a single piece or coil of sheet or thin plate steel that has been slit and expanded and not consisting of welding or joining of multiple pieces of steel; and (2) plank-type safety grating comprised of a single piece or coil of sheet or thin plate steel, typically in thickness of 10 to 18 gauge, pierced and cold formed and without welding or joining of multiple pieces of steel.

[23] Subject goods produced by different manufacturing processes (welding, hydraulic pressing or riveting) are fully interchangeable. Hydraulically-produced or riveting-produced gratings are substitutable in every respect for grating produced by welding processes and vice-versa. They have the same or comparable physical and mechanical properties in accordance with the international standards and specifications described earlier.

[24] Subject goods have a multitude of load-bearing end uses, including industrial flooring, walkways, mezzanines, stairways, trenches, highway signs platforms and fire escapes. Primary markets are large-scale oil production structures and systems, electric power generating plants, steel mills, cement plants, saw mills, pulp and paper mills, mining, automotive plants and other industrial facilities. Although primarily used in large industrial projects, commercial and residential applications for these goods are also commonplace.

Classification of imports

[25] Steel grating is normally imported into Canada under the following Harmonized System (HS) classification numbers:

• 7308.90.00.10
• 7308.90.00.20
• 7308.90.00.30
• 7308.90.00.40
• 7308.90.00.50
• 7308.90.00.60
• 7308.90.00.95
• 7308.90.00.96
• 7308.90.00.99

[26] This listing of tariff classification numbers is for convenience of reference only. The tariff classification number provided may include goods that are not subject goods and subject goods may be imported into Canada under tariff classification numbers other than those provided. Refer to the product definition for authoritative details regarding the subject goods.

Period of review

[27] The period of review (POR) for the CBSA’s expiry review investigation is January 1, 2018, to December 31, 2020.

Canadian industry

[28] The Canadian industry for steel grating is comprised of Borden Metal Products (Canada) Ltd. and Fisher & Ludlow Ltd.

Borden Metal Products (Canada) Ltd.

[29] Borden Gratings has been involved in the manufacture of pressure locked and riveted grating gratings at its plant in Beeton, Ontario since 1955. Borden Gratings has shifted its focus to fabricating grating as opposed to manufacturing grating.^{Footnote 4}

Fisher & Ludlow Ltd.

[30] Fisher & Ludlow was established in 1954 as a grating manufacturer in Burlington, Ontario. The company was purchased by Harris Steel in 1976. In March 2007, Harris Steel was purchased by Nucor Corporation. Its Wetaskiwin, Alberta plant produces standard grating.^{Footnote 5}

Canadian market

[31] The imports of certain steel grating during the POR are presented in Table 1 below. The CBSA cannot release specific quantitative data respecting the value and volume of Canadian production of steel grating sold for domestic consumption as it would lead to the disclosure of confidential information.

[32] The import data collected by the CBSA does not reflect standard reporting for quantities. As such, importers may report volume in a number of different units of measurement. In light of the wide variety of products included in the product definition, the import quantities shown on the CBSA import documents were often expressed in different units of measure, such as metric tonnes, number of pieces, etc. Accordingly, the CBSA data could not be used to calculate total volume or perform any meaningful calculations of unit value.

Enforcement data

[36] In the enforcement of the CITT’s order during the POR, as detailed in Table 2 below, the total amount of anti-dumping and countervailing duty collected on subject imports from China was approximately CAD $1.6 million. By comparison, the value for duty of all subject imports from China during the POR was approximately CAD $7.9 million.^{Footnote 7}

Parties to the proceedings

[37] On March 30, 2021, a notice concerning the initiation of the expiry review investigation and the ERQs were sent to the known Canadian producers, importers and exporters. The GOC was also sent an ERQ relating to subsidy.

[38] The ERQs requested information relevant to the CBSA’s consideration of the expiry review factors, as listed in subsection 37.2(1) of the Special Import Measures Regulations (SIMR).

[39] Borden Gratings and Fisher & Ludlow participated in the expiry review investigation and responded to the producer ERQ. Additional documents were also filed on behalf of Fisher & Ludlow prior to the closing of the record.^{Footnote 9}

[40] Fisher & Ludlow provided a case brief^{Footnote 10} to the CBSA in support of its position that continued or resumed dumping and subsidizing of certain steel grating from China is likely if the CITT’s order is rescinded.

[41] No importer or exporter provided a response to the CBSA’s ERQs or otherwise participated in the expiry review.

[42] The GOC did not provide a response to the CBSA’s ERQ nor did it submit a case brief or reply submission.

Information considered by the CBSA

Position of the parties—dumping

Consideration and analysis—dumping

[63] In making a determination under paragraph 76.03(7)(a) of SIMA whether the expiry of the order is likely to result in the continuation or resumption of dumping of the goods, the CBSA may consider factors identified in subsection 37.2(1) of the SIMR, as well as any other factors relevant in the circumstances.

[64] Guided by the aforementioned factors and having considered the information on the administrative record, the following list represents a summary of the factors analyzed by the CBSA in conducting this expiry review investigation with respect to dumping:

• continued dumping of certain steel grating while the CITT order was in effect and the inability of Chinese exporters to compete at non-dumped prices
• production capacity and export-orientation of steel grating producers in China
• decline of Canadian oil and gas, construction and manufacturing sectors leading to decreased demand for steel grating
• continued weakening in domestic demand for steel in China leading to an increasing reliance on export markets
• anti-dumping measures concerning Chinese steel grating in the United States and Turkey

[65] As mentioned earlier in this report, the CBSA received ERQ responses from two Canadian producers. One of the responding Canadian producers, Fisher & Ludlow, also submitted supplementary information prior to the closing of the record. Case briefs were also filed on behalf of Fisher & Ludlow. The CBSA did not receive ERQ responses from any importers, exporters or producers of subject goods or from the GOC. The CBSA relied on the ERQ responses and information submitted by these parties, as well as the other information on the administrative record for purposes of this expiry review investigation.

Continued dumping of certain steel grating while the CITT order was in effect and the inability of Chinese exporters to compete at non-dumped prices

[66] Information on anti-dumping duties collected during the POR is presented in the Enforcement Data section. Importations of certain steel grating from China have resulted in the assessment of anti-dumping and countervailing duties of approximately 1.6 million dollars on 100% of the subject goods imported into Canada from China during the POR.^{Footnote 27}

[67] Although imports of subject goods into Canada have declined substantially since anti-dumping duties were first imposed, low volumes continued to be imported during the POR. The value of subject goods from China represents a relatively small proportion of the total Canadian market during the POR. The small volume of imports since the anti-dumping duties of 85% of the export price were imposed is an indicator that Chinese steel grating cannot be sold in the Canadian market at non-dumped prices. It is also an indication that exporters in China have a continued interest in the Canadian market.

[68] On July 14, 2015, the CBSA concluded a re-investigation to update the normal values, export prices, and amounts of subsidy of certain steel grating from China. Neither the exporters nor the GOC participated in the re-investigation. Imports of subject goods from all exporters are therefore subject to a ministerial specification pursuant to subsection 29(1) of SIMA, which specifies that the normal value shall be determined based on the export price plus an amount equal to 85% of that export price, resulting in anti-dumping duties equal to 85% of the export price. The lack of exporter participation suggests that there was no incentive to provide information to the CBSA as the exporters are unable to sell to Canadian importers at non-dumped prices.

Production capacity and export-orientation of steel grating producers in China

[69] There are a large number of steel grating producers in China. Information on the record identifies website sources listing hundreds of producers and exporters that offer a wide range of steel grating for export sale.

[70] The record also contains information on the production capacities of steel grating producers in China. For example, Ningbo Jiulong Machinery Manufacturing Co. Ltd.’s production capacity for steel grating is 100,000 tons^{Footnote 28} and exports approximately half of its production to destinations such as North America.^{Footnote 29} Yantai Xinke Steel Structure Co. Ltd., a large producer of steel grating in China with an annual capacity of 50,000 tons,^{Footnote 30} lists America as one of its main export markets.^{Footnote 31} Wuxi Royce Grating Machinery Manufacturing Co., Ltd. produces 60,000 tons of steel grating annually, 70% of which is exported.^{Footnote 32} Shanghai Klemp Metal Products Co., Ltd.’s production capacity for steel grating is 15,000 tons annually and approximately 70% of production is exported.^{Footnote 33} Lastly, Yantai Wanjie New Materials Co., Ltd., with its 20,000 ton steel grating production capacity, exports its production to many countries.^{Footnote 34}

[71] The steel overcapacity situation in China has been well documented in economic reports and recent trade remedy cases. In the OCTG I Expiry Review decision issued in December 2020, the Tribunal recognized that “the perennial excess global steel capacity, largely attributable to massive production in China, remains an important issue overhanging the Canadian and global steel markets […] Excess capacity creates significant incentive for Chinese producers to pursue export sales, at low prices, in order to maintain high capacity utilization.” China's steel production and inventories reached record highs in the first half of 2020. Despite the pandemic, by December 2020, China was on track to reach 1 billion tons of steel production in 2020, exceeding 2019's production record of 996.3 million tons. The noted increase in capacity was undertaken despite the slowing global demand for steel caused by COVID-19, an important contributor to global steel overcapacity in general.^{Footnote 35}

Decline of Canadian oil and gas, construction and manufacturing sectors leading to decreased demand for steel grating

[72] The health of the oil and gas sector in Canada is important to the demand for steel grating because of the sector's size and substantial requirements for industrial physical infrastructure. With the price of oil hitting record lows in 2020, many Canadian oil and gas companies (customers of steel grating) reduced their capital spending (e.g., Suncor, Pembina Pipeline Corporation, Enerplus Corporation, Vermilion Energy Inc, Husky Energy Inc. Crescent Point Energy Corp., Cenovus Energy Inc., and TC Energy).^{Footnote 36}

[73] Although the Canadian oil and gas pricing is expected to recover and capital spending to accordingly increase in 2021, it is important to note that the total estimated investment in 2020 ($24 billion) was the lowest in more than a decade and market demand for steel grating remains low. Oil and gas customers will remain price sensitive while they recover and will be inclined to prefer low priced commodity materials for their infrastructure projects.^{Footnote 37} Any increase in demand will very likely be met by increased import supply from China absent trade remedies.

[74] Additionally, the COVID-19 pandemic limited the demand for steel grating due to government lockdowns and the decline in construction projects and production activities of end-use industries.^{Footnote 38} COVID-19 also negatively impacted global supply chains, manufacturing, delivery schedules, and sales of various goods.

[75] According to TD Economics, Canada’s manufacturing sector has been on a decline since the end of 2019 and conditions were worsened by pandemic. Scotiabank Economics notes that manufacturing sales decreased in the fourth quarter of 2020. In December 2020, Statistics Canada reported that non-residential investment remained at $4.4 billion for the third consecutive month and industrial investment was down 0.2%. The total value of building permits declined 2.3% in 2020 and the non-residential sector posted the largest decline since 2009, down 17% to $33.8 billion. All non-residential sectors reported declines in December 2020, including a decline in the industrial sector of 24.4% which is closely linked to the steel grating market. Overall, the non-residential sectors fell a total of 10.8% to $2.7 billion.^{Footnote 39} As a result of these disruptions, the growth prospects for the steel grating market are limited.

[76] These negative changes in market conditions in Canada have led to decreased demand for steel grating and increased downward pressure on the price of steel grating. As steel grating is a fully substitutable commodity product that competes mainly on the basis of price,^{Footnote 40} Canadian oil and gas, construction and manufacturing companies would be incentivized to purchase from the lowest-priced suppliers of steel grating. This could potentially lead to resumed dumping of certain steel grating.

Continued weakening in domestic demand for steel in China leading to an increasing reliance on export markets

[77] Chinese steel grating producers look to export markets when local demand for steel grating is weak. Demand in the commercial and industrial construction sectors in China can be used as a proxy for local steel grating demand because steel grating is a construction input.

[78] As noted by Fisher & Ludlow, in March 2020, GlobalData projected construction sector growth for North-East Asia in 2020 to slow to 1.0%, and to -1.2% for South and South-East Asia with South and South-East Asian growth being closely tied to China's demand. The slow growth in the building and construction industry in China and other Asian markets will likely reduce demand for steel grating in China and other proximate markets, forcing Chinese steel grating producers to turn to other international markets, including Canada, as homes for their products.^{Footnote 41}

[79] As Chinese demand slows, steel output in China has increased to extraordinary levels. China’s share of global crude steel output rose to 57.5% over January to November of 2020, compared to 53.3% for the entire year of 2019 according to World Steel Association data.^{Footnote 42} For every month since April 2020, China’s crude steel production recorded on-year growth. Over January to November 2020, China produced 961 million tonnes of crude steel, up 5.5% annually. At the same time, the total steel output worldwide dropped by 1.3% annually to 1.7 billion tonnes, with the output from 63 countries and regions (excluding China) dropping 9.2% annually.^{Footnote 43}

[80] The weakening domestic demand combined with the large production capacity and an export-oriented philosophy suggests that steel grating producers would increase their efforts to export steel grating.

Anti-dumping measures concerning Chinese steel grating in the U.S. and Turkey

[81] As noted by Fisher & Ludlow, the U.S. and Turkey currently have anti-dumping measures in place on steel grating from China.

[82] In the U.S., anti-dumping duties have been imposed on Chinese steel grating imports since 2010.^{Footnote 44} Due to Canada’s close proximity to the U.S., Chinese steel grating exports can easily be diverted to Canada.

[83] The USITC recently extended its order in the five-year sunset review concerning steel grating from China on May 7, 2021.^{Footnote 45}

[84] The USITC found that the revocation of the orders would likely lead to a "significant volume of subject imports that would likely significantly undersell the domestic like product, leading subject imports to gain market share and/or have price-depressing or suppressing effects on the domestic like product." It further noted that "subject imports' significant volume and price effects would consequently likely have a significant adverse effect on the domestic industry's production, capacity utilization, shipments, employment, and profitability."^{Footnote 46}

[85] With the continuation of the U.S. measures and the steady decline of steel grating imports into the U.S. from 2015 to 2019, Canada is exposed to diversion risk for available volumes of Chinese steel grating.^{Footnote 47}

[86] Additionally, the U.S. continues to maintain a 25% duty on a diversity of steel products from China under Section 301 of the Trade Act of 1974, including steel grating.^{Footnote 48}

[87] Turkey also imposed a safeguard on products imported under tariff subheading 7308.90 in 2018, under which steel grating is classified. A result of this safeguard would be incentive for Chinese producers to direct exports to the U.S. Both countries’ trade measures against steel grating would cause an elevated risk of diversion of steel grating to the Canadian market in the absence of the current order.^{Footnote 49}

Position of the parties—subsidizing

Consideration and analysis—subsidizing

[100] In making a determination under paragraph 76.03(7)(a) of SIMA whether the expiry of the order in respect of goods from China is likely to result in the continuation or resumption of subsidizing of these goods, the CBSA may consider factors identified in subsection 37.2(1) of the SIMR, as well as any other factors relevant in the circumstances.

[101] No exporters or importers provided a response to the ERQ, nor did they file case briefs or reply submissions. Likewise, the GOC did not provide a response to the ERQ, nor did the GOC provide a case brief or reply submission.

[102] In the absence of participation from exporters, importers or the GOC, the CBSA relied on other information in assessing the likelihood of continued or resumed subsidization should the CITT’s order be rescinded.

[103] Guided by the aforementioned factors and having considered the information on the administrative record, the following list represents a summary of the factors analyzed by the CBSA in conducting this expiry review investigation with respect to subsidization:

• continued subsidizing of steel grating while the order was in effect
• current countervailing measures concerning Chinese steel grating in the U.S. and other Chinese steel products in Canada

Continued subsidizing of steel grating while the order was in effect

[104] In light of the lack of participation from Chinese producers and exporters of subject goods and the lack of participation by the GOC in the most recent re-investigation, the CBSA relied on information from the original subsidy investigation in assessing the likelihood of continued or resumed subsidization should the CITT order be rescinded.

[105] During the original subsidy investigation in 2010, 62 potential subsidy programs were investigated and 3 of these subsidy programs were determined to have conferred benefits to the cooperative exporters. Expressed as a percentage of export price, the amounts of subsidy determined by the CBSA for the cooperative exporters ranged from 9.45% to 12.58%.

[106] A list of the programs that were used by cooperative exporters at the time of the final determination is as follows:

• Export Assistance Grant
• Award of Taxpayers in Yanghang Industrial Park
• Input Materials Provided by Government at Less than Fair Market Value

[107] It was found that 100% of the goods exported from China were subsidized. The weighted average amount of subsidy, expressed as a percentage of the export price, was equal to 174.99%. The amounts of subsidy found for cooperative exporters ranged from 543 to 632 Renminbi (RMB) per metric tonne (MT). The amount of subsidy for all other exporters was determined to be equal to 13,064 RMB per MT, as determined according to a Ministerial specification pursuant to subsection 30.4(2) of SIMA.

[108] Detailed descriptions of the programs and explanations as to why they were regarded as countervailable subsidies are contained in the CBSA’s Statement of Reasons issued at the final determination.

[109] While the order was in place, Chinese steel grating producers have maintained presence in the Canadian market through exports as can be seen in Table 1.

[110] Information on countervailing duties collected during the POR is presented in the “Case Enforcement” section. Importations of certain steel grating from China have resulted in the assessment of anti-dumping and countervailing duties of approximately 1.6 million dollars.^{Footnote 59} All subject goods imported into Canada during the POR were assessed countervailing duties.

Current countervailing measures concerning Chinese steel grating in the U.S. and other Chinese steel products in Canada

[111] On May 7, 2021, the USITC determined in its second sunset review of the U.S. steel grating order that revoking the order on imports of steel grating from China would likely lead to a continuation or recurrence of subsidization. In the U.S. Department of Commerce's January 2021 decision, it determined that countervailable subsidy programs in China continue to exist and are used to support steel grating production.^{Footnote 60}

[112] Furthermore, the number of Canadian countervailing measures presently in place against the Chinese steel products demonstrates the GOC’s continued commitment to providing subsidies to Chinese companies operating in the steel industry, including steel grating producers.

[113] For example, in Fabricated Industrial Steel Components, the CBSA found 158 potential subsidy programs, while in Sucker Rods, the CBSA identified 22 potential subsidy programs, some of which may also apply to steel grating.

[114] Additionally, several recent expiry review investigations of other steel products from China have also resulted in conclusions of the likelihood of continued or resumed subsidization.

[115] In Pup Joints, the CBSA concluded that the existence of steel-related countervailing measures against products from China would indicate that the Government of China "placed a great deal of importance on its steel industry and subsidized it accordingly."^{Footnote 61}

[116] In Steel Piling Pipe, the CBSA similarly found that the Government of China continued to be involved in the steel industry and influenced this industry through programs determined by CBSA to be countervailable subsidies.^{Footnote 62}

[117] More recently in OCTG 1, the CBSA found that continued subsidization was likely in light of numerous subsidy (trade remedy) measures imposed by Canada and the U.S. concerning steel tubular products from China.^{Footnote 63} It is likely that Chinese producers and exporters of steel grating also continue to benefit from these countervailable subsidy programs.

Conclusion

[119] For the purpose of making a determination in this expiry review investigation, the CBSA conducted its analysis within the scope of the factors found under subsection 37.2(1) of the SIMR and considering any other factors relevant in the circumstances. Based on the foregoing analysis of pertinent factors and consideration of information on the record, on August 26, 2021, the CBSA made a determination pursuant to paragraph 76.03(7)(a) of SIMA that the expiry of the order made by the CITT on April 18, 2016, in Expiry Review No. RR-2015-001, in respect of certain steel grating originating in or exported from China:

1. is likely to result in the continuation or resumption of dumping of the goods into Canada and
2. is likely to result in the continuation or resumption of subsidizing of the goods exported to Canada

Future action

[120] The CITT has now initiated its expiry review to determine whether the continued or resumed dumping and subsidizing are likely to result in injury. The CITT’s Expiry Review schedule indicates that it will make its decision by February 2, 2022.

[121] If the CITT determines that the expiry of the order with respect to the goods is likely to result in injury, the order will be continued in respect of those goods, with or without amendment. If this is the case, the CBSA will continue to levy anti-dumping and/or countervailing duties on dumped and/or subsidized importations of the subject goods.

[122] If the CITT determines that the expiry of the order with respect to the goods is not likely to result in injury, the order will be rescinded in respect of those goods. Anti-dumping and/or countervailing duties would then no longer be levied on importations of the subject goods, and any anti-dumping and/or countervailing duties paid in respect of goods that were released after the date that the order was scheduled to expire will be returned to the importer.

Information

[123] For further information, please contact the officer listed below:

SIMA Registry and Disclosure Unit
Trade and Anti-dumping Programs Directorate
Canada Border Services Agency
11-100 Metcalfe St
Ottawa ON  K1A 0L8

• Telephone:
• Manshun Tong: 613-954-1666

Email: simaregistry-depotlmsi@cbsa-asfc.gc.ca

Doug Band
Director General
Trade and Anti-dumping Programs Directorate