The Zhitong Finance App learned that in the context of the US steel manufacturer's dumping complaint against Nippon Steel, the US Department of Commerce decided to levy dumping duties of up to 29% on Nippon Steel. This move coincided with Nippon Steel's anti-import commitment to acquire American Steel (X.US). This increase in tariffs is aimed at Nippon Steel's sale of hot rolled steel at low prices in the US between October 2022 and September 2023. Although Nippon Steel has promised not to ship steel plates from overseas factories to the US to obtain support for the acquisition, the timing of the Ministry of Commerce's decision may cause political controversy.

According to the preliminary ruling published in the Federal Register, the US Department of Commerce imposed a 29% dumping duty on Nippon Steel because the company sold hot-rolled steel in the US at a lower than normal price during this period. The ruling was issued on November 13 as part of the Department of Commerce's annual administrative review of dumping cases that have existed since the four major US steel manufacturers first filed complaints in 2016.

Notably, on the same day that the news came to light, Nippon Steel promised the American Steel Union not to ship steel plates from its overseas plants, a key promise in its plan to acquire American Steel for $14.1 billion. However, although the products covered by this promise are different from the products in the dumping case, the timing decided by the US Department of Commerce may be used as a political crackdown by forces opposed to foreign ownership, in particular people such as David McCall, president of the American Federation of Steelworkers. Currently, the two steel companies are awaiting a final decision on the deal from the US Committee on Foreign Investment (CFIUS).

If the new tariffs are finally confirmed, it will have a significant impact on Nippon Steel, as tariffs on its hot-rolled steel products will rise sharply from 1.39% previously. Hot rolled coil is the global reference product for the steel industry and is widely used in various fields such as automobiles, home appliances, and bridges.

In response, Wolf Research analyst Timner Tanners said that as a high-cost producer, Japan is famous for value-added and high-profit products, and is unlikely to become an important participant in commercial-grade products such as hot-rolled coils.

The report did not disclose the exact amount of steel illegally dumped by Nippon Steel, but steel prices in the US fell by 9.3% during the period under review by the Department of Commerce. Unlike aluminum and copper, which are traded globally, steel prices generally vary by region.

Regarding the Department of Commerce's decision, Nippon Steel said in an email statement that the company has always respected the US legal system and will continue to fully comply with the US Trade Remedies Act when evaluating and remedying the impact of imports on the US domestic industry.

Notably, the Department of Commerce's decision is not directly related to CFIUS's decision on the takeover case, as it is part of an annual administrative review of existing dumping cases, and the reviews for the past two years have all been issued around the same time.

Furthermore, as the US president-elect prepares to begin his second term, he promised to implement tariff policies of varying degrees to countries around the world. In this context, the US Department of Commerce's move to raise tariffs on this foreign steel manufacturer has also drawn widespread attention.

Claimants in this dumping case include Cleveland Cliffs, Inc., Nucor Steel, Steel Dynamics Inc., American Steel, and the US subsidiary of Swedish steel manufacturer SSAB AB. Meanwhile, David McCall, who has long criticized Nippon Steel and Japan for illegally dumping steel into the US market, also expressed strong opposition to Nippon Steel's takeover case.