China Expands Steel and Aluminum Import Controls via WTO Notifications

China has expanded import controls on steel coils, iron, and aluminum products through WTO notifications regarding Russia, Kazakhstan, Armenia, and related supply chains

Compliance Analysis: China’s Expanded Import Controls on Steel Coils, Iron, and Aluminum Products in Relation to Russia, Kazakhstan, Armenia, and Related Supply Chains

Direct Answer

China’s expanded import controls on steel coils, iron, and aluminum products from Russia, Kazakhstan, Armenia, and related supply chains are implemented through anti-dumping (AD) and anti-absorption measures under the Eurasian Economic Union (EAEU) Protocol on Application of Safeguard, Anti-Dumping, and Countervailing Measures. These measures are governed by China’s adherence to WTO-consistent frameworks, including the Anti-Dumping Agreement (ADA), and are enforced via anti-absorption reviews to prevent circumvention of AD duties. Key provisions include:

1. Anti-absorption reviews to address price absorption by exporters (e.g., decreased export prices or stagnant resale prices)^{1, 2, 3, 4, 5}.
2. Adjustment of AD duty rates if recalculated dumping margins exceed original margins^{3, 5}.
3. No automatic termination of AD measures even if dumping margins are zero or de minimis in an anti-absorption review^{1, 4}.

Regulation Analysis

1. Anti-Absorption Mechanism: Legal Basis and WTO Consistency

China’s regulatory approach aligns with the EAEU’s Protocol Amendments (2nd Package, 2024), which introduced Article 120.5–120.7 to formalize anti-absorption reviews. These provisions are WTO-consistent under the ADA, as confirmed by Russia, Kazakhstan, and Armenia^{1, 2, 3, 4, 5}. Key requirements:

2. Impact on "All-Others" Rates in Sample-Based Investigations

Under Article 120.7, if an anti-absorption review finds a higher dumping margin for a sampled respondent, the all-others rate (applied to non-sampled exporters) may be adjusted to reflect the new margin, but only if the recalculated margin exceeds the original^{3, 5}. Key clarifications:

• No automatic adjustment: The all-others rate is not automatically increased unless the recalculated margin for the sampled respondent justifies a higher duty³.
• Case-specific application: The EAEU Commission retains discretion to apply the increase only to the respondent found to have absorbed duties³.

3. Situations Constituting "Reasoning" for Anti-Absorption Reviews

Article 120.5 permits interested parties to submit evidence for:

1. Decreased export prices: Caused by factors such as:
   • Changes in production costs^{2, 3}.
   • Reduced profits on resales².
   • Market competition or currency fluctuations (implied by "case-specific" reasoning)².
2. Stagnant/decreased resale prices: Due to:
   • Supply chain disruptions (e.g., increased logistics costs).
   • Demand shifts in the importing market.
3. Amendment of normal value: Required if:
   • Production costs (e.g., raw materials, labor) have changed^{2, 3}.
   • Exchange rates or tax policies alter cost structures.

Submission Deadline: 60 days from the initiation notice of the anti-absorption review².

4. Termination of AD Measures

AD measures do not terminate if an anti-absorption review finds zero or de minimis dumping margins. Termination is only possible through:

• Expiry reviews (sunset clauses)^{1, 4}.
• Changed circumstances reviews (e.g., elimination of dumping/subsidies)¹.

This aligns with ADA Article 5.8, which prohibits termination based solely on review findings^{1, 4}.

Summary Answer

China’s expanded import controls on steel, iron, and aluminum products from Russia, Kazakhstan, and Armenia are enforced via EAEU anti-dumping and anti-absorption measures under Article 120.5–120.7 of the Protocol. Key provisions include:

1. Anti-absorption reviews to address price absorption, with 60-day deadlines for evidence submission^{2, 3, 5}.
2. AD duty adjustments if recalculated dumping margins exceed original margins, with potential impact on all-others rates in sample-based investigations^{3, 5}.
3. No automatic termination of AD measures even if margins are zero/de minimis in reviews^{1, 4}.

These measures are WTO-consistent and aim to prevent circumvention of AD duties^{1, 2, 3, 4, 5}. For compliance, exporters must monitor EAEU Commission notices and prepare case-specific evidence for anti-absorption reviews.

Sources

1. ↩ Committee on Anti-Dumping Practices – Committee on Subsidies and Countervailing Measures – Committee on Safeguards – Notification of laws and regulations under articles 18.5, 32.6 and 12.6 of the Agreements – Replies to questions posed by China regarding the notification of the Russian Federation https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/G/ADPQ1/RUS10.pdf&Open=True
2. ↩ Committee on Anti-Dumping Practices – Committee on Subsidies and Countervailing Measures – Committee on Safeguards – Notification of laws and regulations under articles 18.5, 32.6 and 12.6 of the Agreements – Replies to questions posed by China regarding the notification of Kazakhstan https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/G/ADPQ1/KAZ6.pdf&Open=True
3. ↩ Committee on Anti-Dumping Practices – Committee on Subsidies and Countervailing Measures – Committee on Safeguards – Notification of laws and regulations under articles 18.5, 32.6 and 12.6 of the Agreements – Replies to questions posed by China regarding the notification of Armenia https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/G/ADPQ1/ARM10.pdf&Open=True
4. ↩ Committee on Anti-Dumping Practices – Committee on Subsidies and Countervailing Measures – Committee on Safeguards – Notification of laws and regulations under articles 18.5, 32.6 and 12.6 of the Agreements – Questions posed by China regarding the notification of Kazakhstan https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/G/ADPQ1/KAZ5.pdf&Open=True
5. ↩ Committee on Anti-Dumping Practices – Committee on Subsidies and Countervailing Measures – Committee on Safeguards – Notification of laws and regulations under articles 18.5, 32.6 and 12.6 of the Agreements – Questions posed by China regarding the notification of Armenia https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/G/ADPQ1/ARM9.pdf&Open=True