Commerce Department Vindicates Vietnamese PipeManufacturer
The U.S. Department of Commerce has concluded itsadministrative review of countervailing duties on light-walled rectangular pipeand tube from China, determining that Vietnamese manufacturer Hoa Phat SteelPipe Company Limited made no shipments of Chinese-origin products during thereview period spanning January through December 2022. This significant rulingenables Hoa Phat to participate in the certification program previouslyestablished for the countervailing duty order, potentially saving the company millionsin tariff payments. The determination follows an extensive investigation thatincluded on-site verification at Hoa Phat's facilities in Vietnam conducted inNovember 2024, where Commerce officials confirmed the company's ability totrack hot-rolled steel through its entire production system.
Circumvention Concerns Addressed ThroughVerification Process
At the heart of this case was the question of whetherVietnamese manufacturers were circumventing U.S. trade remedies by usingChinese-origin materials to produce pipe and tube products for export toAmerican markets. In November 2023, Commerce had determined that VietnameseLWRPT made from Chinese hot-rolled steel was indeed circumventing antidumpingand countervailing duty orders on Chinese products. This created a significantcompliance challenge for Vietnamese manufacturers who needed to prove the originof their raw materials. Through the verification process, Hoa Phat successfullydemonstrated that it only used HRS from Vietnamese producers to manufacture theLWRPT exported to the United States during the period of review.
Certification Program Offers Path to DutyExemption
The Commerce Department's certification program representsa pragmatic approach to enforcing trade remedies while allowing legitimatetrade to continue. Under this program, companies that can certify theirproducts are not made using Chinese-origin hot-rolled steel can avoid thecountervailing duties that would otherwise apply. For Hoa Phat, eligibility toparticipate in this program is effective immediately upon publication of thefinal results in the Federal Register on May 5, 2025. The company-specific CBPcase number C-552-915-001 has been established in the Automated CommercialEnvironment for entries of LWRPT from Vietnam produced by Hoa Phat,streamlining the certification process for the manufacturer.
Technical Requirements and ComplianceMechanisms
The Commerce Department's determination hinged on HoaPhat's ability to maintain detailed records of its raw material sourcing andproduction processes. During verification, company officials demonstrated theirtracking system that allows them to trace hot-rolled steel through their entireproduction system. This level of supply chain transparency is increasinglyimportant in international trade as customs authorities worldwide implementmore sophisticated measures to prevent duty evasion. If either exporters orimporters fail to properly certify that LWRPT produced by Hoa Phat was not madeusing Chinese-origin HRS, Commerce will instruct Customs to suspend liquidationand require a cash deposit for estimated countervailing duties at the rate of15.28%.
Scope of the Order and Technical Specifications
The merchandise subject to this order is specificallydefined as certain welded carbon quality light-walled steel pipe and tube ofrectangular (including square) cross-section with a wall thickness of less than4 mm. The term "carbon-quality steel" encompasses both carbon steeland alloy steel containing only small amounts of alloying elements, withprecise limitations on the percentage by weight of various elements includingmanganese (1.80%), silicon (2.25%), copper (1.00%), and several others. Theseproducts are currently classified under the Harmonized Tariff Schedule of theUnited States subheadings 7306.61.50.00 and 7306.61.70.60, though the writtendescription of the scope is considered dispositive for customs purposes.
Administrative Process and Timeline
The Commerce Department's investigation followed astructured timeline that included preliminary results published on September13, 2024, followed by on-site verification in Vietnam from November 18-20,2024. In December 2024, Commerce tolled certain deadlines by 90 days, and inApril 2025, extended the deadline for final results by an additional 30 days.The verification report was released on January 30, 2025, with a subsequentmemorandum clarifying that Hoa Phat's ability to certify the origin of hot-rolledsteel applies to related antidumping orders concerning Korea and Taiwan. Thismethodical process reflects the complexity of international trade remedyenforcement and the importance of due process in these determinations.
Key Takeaways:
• The U.S. Department of Commerce has determined that HoaPhat Steel Pipe Company Limited had no shipments of Chinese-origin light-walledrectangular pipe and tube during 2022, making the Vietnamese manufacturereligible to participate in the certification program that exempts certainimports from countervailing duties of 15.28%.
• Commerce officials verified through on-site inspectionthat Hoa Phat maintains records that allow it to track hot-rolled steel throughits entire production system, confirming the company only usedVietnamese-sourced materials for products exported to the United States.
• The certification program established following theNovember 2023 circumvention determination allows Vietnamese manufacturers toavoid duties if they can prove their products are not made using Chinese-originhot-rolled steel, with Hoa Phat now receiving a company-specific CBP casenumber (C-552-915-001) to facilitate this process.
