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Bid to Ban Imports of Chinese Steel Suffers Setback

Friday, February 17, 2017
Sandler, Travis & Rosenberg Trade Report

United States Steel Corporation announced Feb. 15 the withdrawal of a trade secrets theft claim against imports of Chinese steel after concluding it was too difficult to pursue. The company said it is not dropping allegations of price fixing and false origin labeling to circumvent antidumping and countervailing duties, although the International Trade Commission has moved to dismiss those claims.

In April 2016 US Steel filed a petition requesting that the ITC institute an investigation under Section 337 of the 1930 Tariff Act regarding carbon and alloy steel products from China. Steel industry officials said the unprecedented move was a continuation of efforts to curtail unfair imports of Chinese steel and necessary in light of Beijing’s refusal to address global overcapacity in this sector. Section 337 cases can ultimately result in exclusion orders banning imports of all goods found to be infringing.

US Steel said it withdrew its trade secrets claim because Section 337 was “enacted before the dawn of the Internet age” and is therefore insufficient to address “the proliferation of cyber theft and other cyber crimes committed against American companies.” Today’s businesses are more vulnerable to these crimes because they are “more connected and data-centric than ever before,” the company said, but “when a cyber attack by a state-sponsored actor is carried out upon our corporations, the unbearable burden for response is currently borne by the corporate victim.” The company said that its petition has helped begin a dialogue about “the need to reform our antiquated laws” but that “more cooperation and collaboration is needed between the federal government and the private sector to address the continued threat of malicious cyber crimes and to provide reasonable legal avenues available for corporate victims to seek remedies.”

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