26
Apr
By Eric Schweibenz and John Presper
On April 26, 2016, U.S. Steel Corp. of Pittsburgh, Pennsylvania (“U.S. Steel”) filed a complaint requesting that the ITC commence an investigation pursuant to Section 337.

The complaint alleges that the following entities unlawfully conspire to fix prices and control output and export volumes in violation of Section 1 of the Sherman Act, misappropriated U.S. Steel trade secrets, and falsely designate the origin or manufacturer of steel products being imported or sold for importation into the U.S:

“Proposed Manufacturing Respondents”:

  • Hebei Iron and Steel Group Co., Ltd. of China
  • Hebei Iron & Steel Group Hengshui Strip Rolling Co., Ltd. of China
  • Hebei Iron & Steel (Hong Kong) International Trade Co., Ltd. of China
  • Shanghai Baosteel Group Corporation of China
  • Baoshan Iron & Steel Co., Ltd. of China
  • Baosteel America Inc. of Montvale, New Jersey
  • Jiangsu Shagang Group of China
  • Jiangsu Shagang International Trade Co., Ltd. of China
  • Anshan Iron and Steel Group of China
  • Angang Group International Trade Corporation of China
  • Angang Group Hong Kong Co. Ltd. of China
  • Wuhan Iron and Steel Group Corp. of China
  • Wuhan Iron and Steel Co., Ltd. of China
  • WISCO America Co., Ltd. of Newport Beach, California
  • Shougang Group of China
  • China Shougang Intemational Trade & Engineering Corporation of China
  • Shandong Iron and Steel Group Co. Ltd. of China
  • Shandong Iron and Steel Co., Ltd.; of China
  • Jigang Hong Kong Holdings Co., Ltd. of China
  • Jinan Steel International Trade Co., Ltd. of China
  • Magang Group Holding Co. Ltd. of China
  • Maanshan Iron and Steel Co. Ltd. of China
  • Bohai Iron and Steel Group of China
  • Tianjin Pipe (Group) Corporation of China
  • Tianjin Pipe International Economic & Trading Corporation of China
  • TPCO Enterprise, Inc. of Houston, Texas
  • TPCO America Corporation of Gregory, Texas
  • Benxi Steel (Group) Co. Ltd. of China
  • Benxi Iron and Steel (Group) International Economic and Trading Co. Ltd. of China
  • Hunan Valin Steel Co. Ltd. of China
  • Hunan Valin Xiangtan Iron and Steel Co. Ltd. of China

“Proposed Distributor Respondents”:

  • Tianjin Tiangang Guanye of China
  • Wuxi Sunny Xin Rui Science and Technology Co., Ltd. of China
  • Taian JNC Industrial Co., Ltd. of China
  • EQ Metal (Shanghai) Co., Ltd. of China
  • Kunshan Xinbei International Trade Co., Ltd. of China
  • Tianjin Xinhai Trade Co., Ltd. of China
  • Tianjin Xinlianxin Steel Pipe Co., Ltd. of China
  • Tianjin Xinyue Industrial and Trade Co., Ltd. of China
  • Xian Linkun Materials (Steel Pipe Supplies) Co., Ltd.

According to the complaint, the Proposed Manufacturer Respondents work together to injure U.S. competitors, including U.S. Steel, through their cartel, the China Iron and Steel Association.  Specifically, the complaint alleges that the Proposed Manufacturer Respondents conspire to control raw material input prices, share cost and capacity information, and regulate production and prices for steel products exported to the U.S.  The Proposed Manufacturer Respondents also share production schedules and time the release of products across multiple companies which enables them to coordinate exports of new products to flood the U.S. market and harm competitors.

The complaint also alleges that some of the Proposed Manufacturer Respondents have used valuable trade secrets stolen from U.S. Steel to produce advanced high-strength steel that no Chinese manufacturer had been able to commercialize before the theft.  Specifically, in January 2011, the Chinese government allegedly hacked U.S. Steel’s research computers and equipment, stealing proprietary methods for manufacturing these products.  Soon thereafter, the Baosteel Respondents began producing and exporting the very highest grades of advanced high-strength steel, even though they had previously been unable to do so.  Chinese imports created with U.S. Steel’s stolen trade secrets compete against and undercut U.S. Steel’s own products.

The complaint further alleges that U.S. Steel has a substantial domestic industry in the steel products at issue, employs more than fifteen thousand steelworkers, and can produce up to l7 million tons of steel products annually at facilities located across the U.S.  As an integrated manufacturer, U.S. Steel produces steel from raw iron ore all the way through to finished steel products using confidential and proprietary trade secrets.  The unfair trade practices of the Proposed Manufacturer Respondents and Proposed Distributor Respondents allegedly have caused substantial injury and threaten further injury to U.S. Steel’s domestic industry, “from idling mills and finishing facilities to the loss of thousands of American jobs.”

With respect to potential remedy, U.S. Steel requests that the ITC issue a permanent limited exclusion order and cease-and-desist orders directed at the Proposed Respondents.  U.S. Steel also seeks a general exclusion order barring all unfairly traded Chinese steel products that are manufactured abroad, sold for importation, or sold in the U.S. after importation.
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