Chinese Steel Could Be Banned From U.S. in Opening Blast of Trade War

Is it a coincidence that Trump is the Republican nominee for President at the same time U.S. steel is bringing a case that could ban imports of Chinese steel? According to Socionomic theory, it is not. Furthermore, a victory by U.S. steel could open the floodgates from American companies complaining of IP theft.

Bloomberg: U.S. Steel Seeking China Import Ban After Alleged Hacking

U.S. Steel Corp. is asking the U.S. government to ban unfairly traded Chinese steel imports, alleging producers stole the fruits of decades of research in a 2010 hacking attack.

If successful, the petition will block carbon and alloy steel produced in China from entering the U.S. Most critically, it will prevent those who allegedly stole U.S. Steel’s intellectual property from making billions of dollars from decades of research. The International Trade Commission has 30 days to decide whether to initiate a case.

...So-called 337 cases, known for the section of the trade law they seek relief under, are more commonly used for medical devices and technology. This year, such cases have been filed regarding hoverboards, cervical collars and smart watches, for example.

The investigation was launched on May 26.

According to the Chinese report, 40 companies could see their products banned from the U.S. market.

EO: 揭秘钢铁“337”调查：或是一场美国人的阴谋

The United States Steel Corporation as the plaintiff accused the Chinese company part of carbon steel, alloy steel product exports to the US, in the United States imports and unfair competitive practices in the United States sales. Charges include three elements: first, the conspiracy to fix prices, production and exports, in violation of article 1 ( "USC" Volume 15, No. 1) the provisions of "Sherman Act"; second, occupation and use United States steel Corporation's trade secrets; third, false origin or manufacturer identification, violation of the "Lanham Act" ( "USC" Vol. 15 1125 (a) paragraph) of.

Involved 40 steel companies, subject to charges vary, and some all three involve some parts involved. "From the price-fixing to steal trade secrets, and then forged origin, such a comprehensive investigation of the allegations in the 337 history is rare." Yang Chen told the Economic Observer newspaper.

The Chinese note that not only will a loss invite more 337 charges, but other countries may also follow the U.S. example:

If lost, can not rule out the future more more than other steel products are instituted an investigation, as well as other international markets outside the United States to follow the US practice. "Yang Chen expressed to the Economic Observer.

China hasn't done well in prior cases, but the steel companies are energetically opposing these charges and believe them to be politically motivated:

Previous "337 investigation", Chinese enterprises in many cases this is not so positive. Data show that in the past has been 47 judgments from the "337 investigation" cases against Chinese companies rate up to 60%, far higher than the international average losing 26%.

The reasons for this are manifold. Yang Chen to the Economic Observer newspaper, the "337" itself is more complex, relatively high cost of litigation, a case of legal fees, security companies and other third-party evidence of the cost, it may take hundreds of millions of dollars, the cost of responding to the high order many companies overwhelmed, give up the respondent will be relatively large.

2003 Battery "Section 337" cases, legal fees up to $ 3 million, equivalent to the total profit of the year battery industry exports; 2005 rubber chemicals "337" cases, Chinese companies need to pay $ 20 million.

But this is different. "We believe this 'Section 337', political background thicker some evidence the prosecution can tenable legal level is very weak, China will have a significant chance of winning." Yang Chen told the Economic Observer reported, more importantly, actively responding to this is to show that China's iron and steel enterprises "attitude."