Statement of reasons—Expiry review determination: Cold-rolled steel (CRS 2023 ER)

Parties contending that continued or resumed dumping is likely

AMD, Algoma and Stelco (collectively, the “Canadian producers”)

[64] The Canadian producers made representations through their case brief in support of their position that dumping from China, South Korea and Vietnam is likely to continue or resume in the event the present finding expires. Accordingly, it is argued that the measures should remain in place.

[65] The main factors identified by the Canadian producers can be summarized as follows:

Common factors impacting subject countries

• Global Economic Conditions
• Global Excess Capacity
• Section 20 conditions in China and Vietnam
• Attractiveness of the Canadian Market
• Trade Measures in Other Jurisdictions

China

• China Economic Conditions
• Production and Overcapacity in China
• China’s Export Orientation

South Korea

• South Korea Economic Conditions
• Production and Overcapacity in South Korea
• South Korea's Export Orientation

Vietnam

• Vietnam Economic Conditions
• Production and Overcapacity in Vietnam
• Vietnam’s Export Challenges

Common factors impacting subject countries

[66] The Canadian producers submit that international market conditions make it likely that large volumes of CRS will be exported to Canada at low prices if the finding expires. They submit that the international market is volatile and that the situation is expected to continue in the near term. There is excess capacity in the steel industry, including in the flat-rolled steel sector. In order to spread high fixed costs, it is submitted that CRS producers are incentivized to increase production and to look to overseas markets to export their goods. At the same time, demand is expected to be weak globally. The producers contend that this situation will make the Canadian domestic industry susceptible to continued or resumed dumping if the finding expires. Additional details are discussed below.

Global economic conditions^{Footnote 13}

[67] The Canadian producers refer to a number of reports and publications on global economic conditions. For example, the International Monetary Fund (IMF) anticipate slow economic growth in 2023 and 2024. A recent report cites the effect of high global inflation, the ongoing Russia-Ukraine war, and trade disruptions as negatively impacting the global economy. The IMF notes that global gross domestic product (GDP) is projected to grow by only 3% in 2023 and 2.9% in 2024. Projected issues in China’s real estate sector are expected to also add volatility in the global market.

[68] The Canadian producers state that this is particularly concerning if the finding were to expire. China’s economy is still lagging, as are the economies of many of its export markets. They point out that the US is a market that has rebounded stronger than most others, and that since they have multiple trade measures against CRS from China, CRS producers in China in particular will be seeking new markets to alleviate excess CRS production capacity.

[69] Many industrial sectors, including CRS, are facing challenges because of these volatile economic conditions. If the CITT’s finding expires at this time, Canadian producers of CRS submit that they would be left without protection and become more vulnerable to imports of dumped goods.

[70] The Canadian Producers contend that global excess production capacity remains a serious problem for the steel industry. They are of the opinion that some of the recent progress in shrinking global excess steel production capacity is being offset by new capacity increases.

[71] They reference a June 2023 report where the Organization for Economic Co-operation and Development (OECD) stated that the gap between global steel production and capacity increased to 628 million MT in 2022, up from 513 million MT in 2021. Overall global steel making capacity increased again in 2022 to reach a new record high of 2,459 million MT. As a result, global steel production as a share of capacity fell from 78.9% in 2021 to 74.5% in 2022. In reporting these figures, the OECD stated, “Such levels of capacity utilisation are not in line with a healthy and financially viable industry.”^{Footnote 14}

[72] The Canadian producers go on to state that planned gross capacity additions are expected in the 2023 to 2025 period. The OECD reports that 60 million MT of steel capacity additions are underway, and another 106 million MT are planned over the 2023 to 2025 period. The majority of these expansion projects are in Asia, where the subject countries are located.

[73] The Canadian producers are of the opinion that after years of efforts to address the capacity issues, excess steel capacity continues to be a significant problem and is a problem that is once again worsening, particularly in light of current steel demand that is not keeping pace with capacity expansions. As is well documented in past trade remedy cases, excess steel production capacity precipitates the dumping of exports, making it more likely that subject good producers will resume exporting CRS to Canada at dumped and subsidized prices if the finding expires.

Section 20 conditions in China and Vietnam

[74] Section 20 of SIMA may be applied to determine the normal value of goods where certain conditions prevail in the domestic market of the exporting country. In the case of a prescribed country, under paragraph 20(1)(a) of SIMA, it is applied where, in the opinion of the CBSA, domestic prices are substantially determined by the government of that country and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market. Where section 20 is applicable, normal values for the goods are not determined based on domestic prices or costs in that country.

[75] During the original CRS investigation, the CBSA formed the opinion that sections 20 conditions exist in both China and Vietnam.

[76] The Canadian producers submit that an expiry review is not the appropriate proceeding for the CBSA to reconsider whether section 20 conditions exist in any of the subject countries.^{Footnote 15}

[77] The case brief submitted by the Canadian producers nonetheless included additional details in an appendix regarding the continued existence of section 20 conditions in Vietnam and China.^{Footnote 16}

The attractiveness of the Canadian market^{Footnote 17}

[78] The Canadian producers point out that in recent history, similar to with many steel products, there has been a price gap between domestic North American CRS prices and CRS prices in subject countries. At the time of the original investigation this price gap did not discourage subject good producers from exporting CRS to Canada at dumped and subsidized prices. The Canadian producers are of the opinion that there is nothing on the CBSA’s record showing a change in circumstances such that the historical price gap will dissuade subject good producers from exporting subject goods to Canada at dumped and subsidized prices if the finding expires.

[79] They go on to submit that while the volume of subject good imports have been minimal in recent years, the volume of non-like goods CRS imports from China in particular has been rising. They refer to the following table which reports imports of all CRS (subject and non-subject) from China and other countries, as reported by Statistics Canada.^{Footnote 18}

[80] The table shows that starting in 2021, China began exporting increasing volumes of non-subject CRS to Canada. In 2021 the volumes increased 10-fold year-on-year and in 2022 increased again by a significant margin. The Canadian producers suggest that these trends show that Chinese CRS producers remain highly interested in the Canadian CRS market, have maintained sales channels in Canada and have adapted to the finding by shifting to different market segments.

[81] The Canadian producers go on to submit that the Canadian economy is in a period of modest, but stable growth and refer to a variety of publications to support this.

[82] For example, they refer to a Bank of Canada forecast in October 2023 that projects Canada’s 2023 GDP growth to be a modest 1.2%, down from its 1.8% forecast just three months earlier. The Bank of Canada also lowered its 2024 GDP forecast to 0.9%, down from 1.2% in its July 2023 report. The Bank of Canada forecasts GDP growth rebounding (slightly) to 2.5% in 2025. The Bank of Canada has raised its CPI inflation forecast for 2023 to 3.9% (from 3.7% in July 2023), meaning inflation growth will be 3-times GDP growth. The Bank of Canada has also raised its inflation forecast for 2024 (3.0%, up from 2.5% in July 2023) and 2025 (2.2%, up from 2.1% in July 2023).

[83] The Canadian producers reiterate that while Canada’s economy will see some growth over 2023 and through 2025, the growth is expected to be modest and inflation will continue to exceed growth in 2024.

[84] Canada is a relatively high priced market and will be an attractive market for CRS producers, particularly those that face weakening demand in their home markets and primary export markets. However, with weak forecast economic growth there will be insufficient Canadian demand to absorb an influx of subject good imports if the finding is allowed to expire. Further, producers of subject goods would need to displace established CRS import and domestic sources in Canada.

[85] They conclude by submitting that Canada’s mature CRS market and forecasted economic conditions increase the likelihood that subject goods will be exported to Canada at dumped and subsidized prices if the finding expires.

Trade measures in other jurisdictions^{Footnote 19}

[86] The Canadian producers assert that if the finding is not renewed, subject countries will resume exporting CRS to Canada due to the combination of excess forecast production and trade measures imposed by other countries.

[87] Since the EU, the US, and various other countries have trade measures against subject countries’ CRS exports, there are not a lot of options for exporters in China, South Korea, or Vietnam to export excess inventory. These measures divert subject goods to markets without trade remedies, which would include Canada if the finding is permitted to expire.

[88] The Canadian producers provided the following table listing trade remedies in place against CRS from China, South Korea and Vietnam in various other jurisdictions.^{Footnote 20}

[89] The Canadian producers observe that the majority of the trade measures listed above were imposed relatively recently (2016 or after). The countries listed in the table above, plus Canada, accounted for 65% to 67% of global CRS consumption outside the subject countries over the 2019 to 2023 period.

[90] The Canadian producers also go on to refer to a number of other trade measures aside from anti-dumping and countervailing duties^{Footnote 21}:

• Morocco’s safeguard measures against CRS
• The US Section 232 duties on steel
• The EU steel safeguard

[91] The Canadian producers state that the combination of trade remedies discussed above limit the export markets open to subject goods. If the finding is permitted to expire, Canada will be one of the only western Countries with no trade measure in place against the subject goods, therefore making it likely that CRS exports and excess production are diverted to Canada.

China and the CRS market

China economic conditions^{Footnote 22}

[92] The Canadian producers suggest that domestic economic conditions in China will incentivize Chinese CRS producers to export dumped and subsidized CRS to global markets over the next 12 to 24 months, including Canada if the finding expires.

[93] As previously discussed, China’s economic growth is slowing, with steel demand being weighed down by weak construction activity and other factors. The Canadian producers point out that weak steel demand is particularly weighing on China’s CRS market, where excess production and capacity is expected to increase between 2023 and 2025. It is submitted that these conditions in China will encourage Chinese CRS producers to resume dumping into the Canadian market if the finding expires.

[94] The Canadian producers refer to a number of publications to support their assertions regarding the Chinese economy. For example, a recent IMF report states that China’s GDP grew by only 3% in 2022, significantly less than the 8.4% growth in 2021 that was largely a result of government economic stimulation following COVID-19.

[95] The Canadian producers submit that the housing market decline has affected steel demand in China, including for CRS. China’s total steel demand contracted in both 2021 and 2022 and continued into 2023 amid negative momentum in the construction sector. Management Engineering and Productions Services (MEPS) reported in October 2023 that China’s construction industry continues to see weak indicators for house sales and construction projects.

[96] It is submitted that the housing market decline has also negatively impacted demand for non-construction products that consume CRS such as appliances and furniture industries. China also saw a decline in passenger vehicle sales in June and July 2023 according to a Reuters article, and the Canadian producers suggest that any continued weak CRS consumption by China’s automotive industry can equate to additional production of subject CRS available for export.

[97] In relation to demand for CRS and other downstream products in China, the Canadian Producers included a section in their case brief^{Footnote 23} that reiterated and further discussed the suggestion that economic indicators show that CRS producers in China will face challenging domestic demand conditions over the next 12 to 24 months. These conditions are likely to drive the dumping of CRS exports into the global marketplace.

Production and Overcapacity in China^{Footnote 24}

[98] The Canadian producers point to the impact of global steel demand continuing to slow from where it was a few years ago, while China has continued to build up its steel production capacity. They refer to a number of reports to support this, for example, an OECD publication that discusses China’s excess steelmaking capacity leading to increased levels of production beyond real demand. For 2022, the OECD reported China’s steel capacity at 1,149.9 million MT, which is where most of Asia’s capacity is concentrated.

[99] It is alleged that China’s overcapacity threatens to destabilize the global steel industry because, as the OECD Steel Committee observed, the only way to ensure profitability in the industry is through meaningful reductions in global excess capacity. Despite statements from the Government of China assuring that it would work to control the issue as it relates to steel markets, these statements are not being put into practice.

[100] The Canadian producers refer to various articles to support the issue. For example, a Financial Times publication from December 2023, that discusses Chinese officials telling steel manufacturers that annual production caps would not apply in efforts to stimulate economic growth, effectively prioritizing the country’s economic growth at the expense of efforts to remedy the overcapacity issues. In the first half of 2023, China’s steelmakers largely increased their steel output in anticipation of the economic reopening and resumption of construction activities after emerging from the zero-tolerance policy to COVID-19 in December 2022, but the construction sector remained slow.

[101] The Canadian producers also point to a MEPS report that states that oversupply from domestic mills in China was putting negative pressure on Chinese CRS prices and noted that without annual production caps on Chinese steel producers for 2023, steel prices are falling because of China’s flooding of the market.^{Footnote 25}

[102] China’s domestic CRS demand as well as demand in downstream industries including furniture, manufacturing, and appliances, is sluggish. With slow demand forecasted through 2026, Chinese exporters will have an increased propensity to export to other markets with stronger demand for CRS. This would include Canada.

China’s export orientation^{Footnote 26}

[103] The Canadian producers assert that as the largest steel exporter in the world, China relies on exports to sustain production in its steel industry. The table below shows export data from UN Comtrade.

[104] In 2021, China’s CRS exports rose significantly over 2020, fueled in part by the COVID-19 global economic slowdown and rebound. In 2022, Chinese CRS exports dropped relative to 2021, but remained significantly above 2020 volumes. In 2023, China’s export volumes are on track to increase by 26% year-on-year. It is submitted that these trends show a direct correlation between China’s diminished demand growth, excess production and exports.

[105] The Canadian producers note, referring to various articles and reports, that since 2020, China has steadily increased the proportion of its steel production that is exported, from 4.9% in 2020 to 6.35% and 6.57% in 2021 and 2022 respectively. From January to September 2023, Chinese exports jumped over 31.8% year-over-year. CRS production destined for export was 3% in 2020, 6% in 2021, 4% in 2022 and an estimated 5% in 2023.

Summary: China

[106] The Canadian producers summarize that China’s forecast excess production, diminished economic growth, weakening construction sector, weak CRS demand growth and export dependence make it very likely that Chinese CRS exporters will continue or resume sales to Canada at dumped and subsidized prices if the finding is permitted to expire.

South Korea and the CRS market

South Korea economic conditions^{Footnote 28}

[107] The Canadian producers suggest that South Korea’s general economic indicators increase the likelihood that South Korean steel producers will export CRS to Canada at dumped and subsidized prices in the near to medium term.

[108] According to the Korea Iron & Steel Association, South Korea’s steel industry is considered “the nation’s key industry with high impact on the inter-industries and…a crucial role in the economic growth of Korea.” In 2023, the OECD reported that Korea is the sixth largest steel producing nation measured by steelmaking capacity. However, this industry is not solely focused on its own market. According to the Korea Iron & Steel Association, South Korea’s steel industry is trying to “…increase self sufficiency in steel and to improve the balance of trade by raising export."

[109] The Canadian producers point to an announcement from the Government of South Korea in February 2023 titled a Steel Industry Development Strategy for Transition to Low-Carbon Steel Production. The program, valued at US$150 billion, will not only support the industry in de-carbonisation. The government stated that it would also “…consider taking countermeasures to trade barriers and exports in efforts to boost steel exports,” and it has taken steps to sign agreements with seven steel producing companies including major producers like POSCO and Hyundai Steel to encourage government-industry co-operation.

[110] In summary, South Korean domestic economic indicators are creating an environment that encourages exports. Domestic economic growth is not as robust as it was and is significantly dependent on exports. Meanwhile, the domestic steel industry is specifically focused on increasing exports and investing in production. According to the Canadian producers, the combination of these factors, along with a soft forecast for domestic demand for CRS, create a fertile environment for the dumping of steel.

Production and overcapacity in South Korea^{Footnote 29}

[111] The Canadian producers refer to several publications to support the notion that South Korea has excess production and overcapacity in its steel industry.

[112] For example, according to a Commodities Research Unit (CRU) report, South Korea’s export orientation is evident from its reported excess production, which is presumed to be exported. The report shows that over the POR, South Korea’s excess production is significant and is forecasted to remain that way over the 2024 to 2026 period. Further, the volume of excess production is estimated to be large enough to be many times the size of Canada’s merchant CRS market. This excess production must find export markets. As discussed above, China’s CRS consumption growth is stagnant and there are many markets that have trade remedies against South Korea, including the US, India, Indonesia, Malaysia and Pakistan. This increases the likelihood that South Korea’s excess production will be sold at dumped prices into any available export markets.

[113] Further, while South Korea is forecasted to improve its capacity utilization rate, it will do so by expanding production more quickly than consumption, with the consequence of greater excess production and greater reliance on exports. In both 2024 and 2025, production increases will outpace consumption increases.

[114] In addition, the Canadian producers submit that there is financial motivation for major South Korean producers to ramp up CRS production beyond demand levels for the foreseeable future. Slowdowns in the global steel market resulted in year-on-year flat or diminished profits for major South Korean CRS producers POSCO and Hyundai Steel. CRS producer Dongkuk Steel was only able to report an increase in net profits through an “export-oriented sales strategy” which resulted in “expanded sales of high value-added products such as Luxteel and Appsteel,” both CRS products.^{Footnote 30} It is submitted that these financial results will continue to incentivize South Korean producers to increase production for export sales and dump CRS into the global marketplace to improve capacity utilization rates and lower average costs.

[115] In summary, South Korea’s forecast production, excess production and weak financial results for steel producers increase the likelihood that South Korean CRS producers will export dumped and subsidized CRS to Canada if the finding expires.

South Korea's export orientation^{Footnote 31}

[116] According to the Canadian producers, South Korea’s CRS industry is highly export oriented, and there are several challenges facing South Korea’s export markets.

[117] UN Comtrade reports that collectively, South Korea’s top export markets saw an overall decrease in South Korean CRS imports in 2022 relative to both 2020 and 2021. Although 2023 data is not available, the Canadian producers are of the opinion that the data shows several trends that will incentivize the dumping of South Korean CRS.

[118] One trend they note is the decline of exports to China. China is South Korea’s top historical CRS export market. However, exports to China saw continuous year-on-year declines, dropping 29% in 2021, and a further 21% in 2022. For example, in 2022, major South Korean CRS producers like Hyundai Steel and POSCO have ceased operations in certain provinces like Beijing, Guangdong, and Jiangsu entirely, having fallen behind in price competitiveness due to oversupply and lack of demand for South Korean vehicles in the Chinese market.

[119] As previously discussed, China is anticipated to see its real estate sector struggle for years. The Canadian producers are of the opinion that weak CRS demand growth in China, compounded by decreasing South Korean exports and increasing South Korean excess production, means it is likely that South Korea will need to find new CRS export markets in 2024 and 2025.

Summary: South Korea

[120] The Canadian producers summarize that given historical trends, the sluggish domestic demand for CRS and downstream products, coupled with the weakness in China’s CRS market, forecasted excess production and trade remedies impacting steel in other traditional South Korean CRS export markets, export oriented South Korean producers will be highly incentivized to find new export markets. This increases the likelihood that South Korean CRS producers will resume dumping in the Canadian market if the finding were to expire.

Vietnam and the CRS market

Vietnam economic conditions^{Footnote 33}

[121] The Canadian producers state that economic conditions in Vietnam will likely incentivize Vietnamese steel producers to export CRS to Canada at dumped and subsidized prices if the finding expires.

[122] They point to an IMF report that forecasts Vietnam’s GDP to grow by 4.7% in 2023, 5.8% in 2024, and 6.8% in 2028. However, this growth will not necessarily be attributable to CRS consuming industries. By September 2023, Vietnam’s economy had expanded by 4.24% year-on-year, mainly due to growth in the services sector which accounts for about 40% of the total GDP. Comparatively, the industrial and construction sectors, which consume CRS, grew by only 1.65%, which was the “lowest pace” over the same period from 2011 to 2023, due to weakening global demand. The minimal growth in the industrial and construction sectors can likely be attributed to destabilizing factors from the banking and real estate sectors, which is further discussed below. Thus, the Canadian producers are of the opinion that despite increases in GDP growth, economic conditions do not appear favourable for Vietnam’s domestic CRS market.

[123] The Canadian producers note that in connection with lagging growth in the construction industry, Vietnam’s real estate market turmoil began in 2019 when a wave of economic development led to rapid growth in demand, only to fall short as COVID-19 caused a downturn in home sales. In 2021, heavily-indebted developers turned to corporate bonds for financing after they were unable to finance projects through usual channels. However, in 2022, the government ran an anti-corruption campaign against various high level officials and executives in the real estate sector and proceeded to implement reformative restrictions in the corporate bond market, leading to a “freezing” of corporate bonds.

[124] It is noted that in 2023, Vietnam’s domestic steel demand was weak, and rising costs of production did not improve the landscape. Vietnamese finished steel market sales, which includes CRS products, “decreased sharply” year-on-year compared to 2022.

[125] Based on reports from major Vietnamese steel producers, including the Hoa Phat Group and VN Steel, construction steel prices have fallen 16 times since the start of 2023 due to the “gloomy” real estate market. Specifically, the Hoa Phat Group reported slashed prices for its CB240 coil product, a flat steel product, throughout Vietnam, ranging from approximately US$577 to US$589 in August 2023.^{Footnote 34}

[126] The Canadian producers are of the opinion that these conditions reflect weakening demand in Vietnam and are likely to fuel the dumping of CRS in export markets to sustain production and submit that Canada would be particularly attractive, given Vietnamese exporters’ limited access to the US and Mexico, among other countries.

Production and overcapacity in Vietnam^{Footnote 35}

[127] In their case briefs the Canadian producers refer to several publications to support that there is overcapacity in the Vietnam steel industry. For example, Vietnam Prime Ministerial decision No. 879 establishes the government’s goal of investing in more sustainable and value-competitive methods for priority industries, which include steel sheet, shaped and alloy steel manufacturing, through 2025. Vietnam is also seen as leading the Association of Southeast Asian Nations (ASEAN) regional steel capacity expansion “with half of its production of Semi-finished and finished steel products intended for export”. The ASEAN region’s overcapacity situation is also said to stem from rapid capacity expansions specifically in Vietnam, Indonesia and Malaysia.

[128] According to CRU, Vietnam has CRS production capacity that is far greater than its annual production, which peaked in 2021 and then fell in 2022 and then again in 2023. Vietnam’s forecast capacity utilization rate is forecasted to improve slightly in the years ahead. Nevertheless, the Canadian producers are of the opinion that Vietnam’s capacity utilization rate will remain highly inefficient and the production imperative will incentivize CRS producers to increase production to reduce their average costs. It is submitted that this increases the likelihood that Vietnam’s CRS producers will dump CRS in global export markets.

Vietnam’s export challenges^{Footnote 36}

[129] The Canadian producers suggest that Vietnam’s current export challenges significantly increase the likelihood that Vietnamese CRS producers will dump product into Canada if the finding expires.

[130] They submit that despite the country having significant excess production capacity, Vietnam is a net importer of CRS (i.e. it produces less than it consumes). The Canadian producers are of the opinion that, as a result, Vietnamese CRS producers struggle to compete domestically with CRS imports. Indeed, Vietnam’s Ministry of Industry and Trade imposed anti-dumping duties against Chinese CRS in 2020, and ordered the continuation of these anti-dumping duties in January 2023. This notwithstanding, China’s CRS exports to Vietnam rose year-on-year from 2020 through 2022.

[131] Vietnam has recently faced significant challenges exporting CRS, particularly to western countries. The UN Comtrade table below shows Vietnam’s exports of CRS from 2020 to 2022. In 2021 and 2022, Mexico was Vietnam’s largest CRS export market; however, exports to Mexico fell by 51% year-on-year in 2022. In 2022, Vietnam exports to the US fell by 68% in 2022 and exports to Belgium fell by 51%.

Summary: Vietnam

[132] The Canadian producers are of the opinion that Vietnam is highly likely to resume exporting dumped and subsidized CRS to Canada if the finding expires. The country faces significant demand challenges in its home market and challenges in its export markets. Consequently, Vietnam needs new export markets to absorb production. Canada would be a particularly attractive market given Mexico’s importance to Vietnam and Mexico’s recent trade action. Further, the Mexican trade action is a strong indication that Vietnam CRS exports are intent on marketing their CRS to North America by selling it at dumped and/or subsidized prices.

Parties contending that continued or resumed dumping is unlikely

[133] As previously noted, no exporter or foreign governments participated in this expiry review. None of the parties who did participate contended that resumed or continued dumping of subject goods from China, South Korea and Vietnam is unlikely if the finding expires.

China

[165] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in China, but information on the record shows that there are many companies capable of producing CRS in China.^{Footnote 58}

[166] Regarding the demand for CRS, main downstream industries for CRS include construction, automotive, and consumer household goods. These industries are experiencing a domestic demand decline in China.^{Footnote 59} There is currently a growing real estate crisis in China that poses a risk to the global economy. The supply of housing is not matched with demand, and the property sector has experienced a severe contraction in response to collapsing demand. China’s construction steel demand was expected to decline through the end of 2023.^{Footnote 60}

[167] According to an OECD report, the Chinese government’s attempt at real estate stimulus has failed to improve steel demand. Instead of a stimulus package targeted at locations with the largest housing sales, the policy focuses on the biggest urban areas such as Beijing and Shanghai despite those cities accounting for less than 3% of commercial housing sales. The government’s effort likely will not have a significant impact on stimulating CRS demand for new construction.^{Footnote 61}

[168] Regarding expected growth, a World Bank report forecasts GDP growth at 4.2% in 2024 and 4.4% in 2025. This in contrast to China’s GDP growth that was 6% in 2019 and 6.8% in 2018. These forward-looking growth projections are all lower than pre-pandemic levels. China’s growth is also low compared to other countries in Asia and is lower than the IMF’s projected average for “Emerging and Developing Asia” which comes in at 4.8% for 2024.^{Footnote 62}

[169] Regarding capacity issues, since no ERQ responses were received from Chinese producers, the CBSA has limited information regarding the production levels of CRS producers in China. However the issue is well documented in other CBSA measures in force regarding the Chinese steel industry as well as in the public domain. For example a chief analyst from a Chinese government owned steelmaker admits capacity is a serious problem with the prediction that China’s capacity will total 1.25 billion MT in 2023.^{Footnote 63}

[170] As previously noted by the CITT, “Steel mills are capital intensive with high fixed costs. In order to recover fixed expenses, steel mills must run at high levels of production capacity. When demand in the domestic market decreases, producers will search out foreign markets to maintain capacity utilization to ensure that these fixed costs are recovered.” This is often referred to as the “economics of steel production.”^{Footnote 64} Conditions of overcapacity exacerbate this characteristic as a producer may find it more feasible to sell excess production in foreign markets at depressed prices rather than reduce production, as long as the producer’s variable costs are covered.

[171] Without significant increases in domestic demand, it is reasonable to expect that China’s current high production levels could drive producers to increase exports to sustain their output levels and improve their capacity utilization.

[172] According to an International Trade Administration report, flat-rolled products, including CRS, have been China’s top exported steel product category since 2017, accounting for 59.4% of Chinese steel exports in 2021. Chinese exports are expected to remain strong, especially with many steel importing countries seeking alternative supply to replace Russia because of sanctions and the ongoing war in Ukraine.^{Footnote 65}

[173] Other Asian markets are generally experiencing low demand similar to China and are feeling the impact of China’s economic slowdown. MEPS reported in October 2023 that cheap Chinese coil is plentiful and Chinese exporters are now offering prices that are below other Asian suppliers, while oversupply from domestic mills continued to put negative pressure on prices. The excess of Chinese CRS in the export markets at low prices left little prospect for prices rising in late 2023.^{Footnote 66}

[174] Exporters in China have a propensity to dump CRS and other steel products which is demonstrated by the numerous anti-dumping measures that have been imposed by Canada and other jurisdictions as discussed above in this report.

Determination regarding likelihood of continued or resumed dumping: China

[175] Based on information on the record regarding the large number of producers in China capable of producing a significant amount of CRS, weak domestic demand growth, export dependence and the imposition of anti-dumping measures by other jurisdictions in respect of CRS or similar steel products from China, the CBSA has determined that the expiry of the finding is likely to result in the continuation or resumption of dumping of CRS into Canada from China.

South Korea

[176] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in South Korea.

[177] The Canadian producers contend that South Korea’s forecast CRS demand is not sufficient to disincentivize South Korean CRS producers from dumping excess production into export markets. South Korea’s CRS demand in major downstream industries, such as automotive and construction industries, has slowed in the post-pandemic recovery period and is projected to remain sluggish.^{Footnote 67}

[178] According to the Korea Automobile Importers and Distributors Association, South Korea’s new car registrations decreased by 3.4% month-on-month in September 2023, and decreased by 5.7% year over year. Based on H1 2023 data, domestic auto sales from South Korea’s five main automakers combined also fell by 5.8% year over year, following a series of interest hikes by the central bank. Further, domestic demand for electric vehicles reportedly slowed in Q4 2023 “amid sagging economic growth”. This declining demand prompted the South Korean government to provide temporary EV subsidies to boost sales, which allowed prominent automakers like Hyundai and Kia to temporarily cut prices for certain models, making them as much as 1/3 cheaper in South Korea than in other countries. CRS products for use in automobiles is excluded from the product definition. However, a decline in CRS demand in the South Korean automotive market means there will be significant CRS production that will need to be consumed by non-automotive sectors to maintain production, including non-automotive sectors in export markets such as Canada.^{Footnote 68}

[179] In the construction industry, South Korea’s construction deals fell by a “record margin” in Q4 2022, the largest drop recorded since 2015, due to cooling demand in the property sector and inflationary pressures. Factors such as high borrowing costs, tight credit conditions, and stringent tax and regulatory measures on property created an “unprecedently sharp decline” in the South Korean real estate market, resulting in a continuous housing slump since July 2022.^{Footnote 69}

[180] In term’s of production capacity, information submitted by the Canadian producers shows that South Korea has large CRS capacity, and that its CRS production volumes do exceed its domestic demand.^{Footnote 70}

[181] South Korea’s overall CRS demand, including demand in the downstream automotive and construction industries, is forecast to remain too low to absorb the country’s projected CRS production.

[182] Evidence on the record indicates that POSCO, one of the country’s largest exporters of steel products, including CRS, plans to increase steel production to 52 million MT by 2030. With the increase, the company aims to achieve annual sales revenue of KRW 100 trillion and triple its operating profit as compared to 2022.^{Footnote 71}

[183] With relation to South Korea’s export orientation, the UN Comtrade table included previously in this report show the country’s top export markets.^{Footnote 72} The trend of declining sales to China, historically South Korea’s largest export market, is noted to have the impact of increasing the need for producers of subject goods to find alternative markets for CRS.

[184] An ING Think report from November, 2023 states that exports rebounded in October, driven mainly by solid vehicle and machinery exports, along with signs of improvement in chip exports, suggesting that global demand conditions are holding up well. However, the weak manufacturing indicators hint that the expected export recovery will only be modest. This suggests that an industry like CRS may continue to face the reality that is a slow rebound to previous levels of export performance.^{Footnote 73}

[185] Another trend observed from the export data is that South Korean producers quickly pivoted to other markets, resulting in a 5% increase in overall CRS exports. This included increasing exports by 80% to Mexico, 56% to India, and 42% to Belgium. In 2022, when exports to China dropped by a further 21%, South Korea further increased its exports to markets that saw double digit increases in 2021. This included Indonesia, Türkiye and Belgium.

[186] Two of South Korea’s top ten export markets are located in Europe. With respect to European export markets, CRU forecasts that the EU’s carbon border adjustment mechanism (CBAM) will raise costs on sheet supply from South Korea starting from 2026 onwards to 2030. Further, Germany, a top export market for South Korean CRS, was reportedly experiencing a recession in 2023. Even after a brief economic recovery in May 2023, Germany is expected to see continuous declines in its industrial sector which is largely driven by its automotive sector. Consequently, Korean producers are likely to spend 2024 and 2025 securing market share in non EU markets in order to reduce their exposure to the CBAM as of 2026.^{Footnote 74}

[187] The CBSA has anti-dumping measures in force for the following steel products originating in or exported from South Korea, many of which involved the same exporters.

• Carbon Steel Welded Pipe 2
• Cold-Rolled Steel
• Concrete Reinforcing Bar
• Corrosion-Resistant Steel Sheet
• Hollow Structural Sections
• Line Pipe 2
• Oil Country Tubular Goods 2; and
• Steel Plate 7

[188] Other jurisdictions have also been noted earlier in this report to have trade remedies against flat-rolled steel products, including CRS, from South Korea.

Determination regarding likelihood of continued or resumed dumping: South Korea

[189] Considering the large CRS producers in South Korea and their potential production capacities, the existence of anti-dumping measures in other countries, South Korea’s limited economic growth, and the fact that exporters of CRS from South Korea have a history of being export oriented, the CBSA has determined that the expiry of the finding is likely to result in the continuation or resumption of dumping of CRS into Canada from South Korea.

Vietnam

[190] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in Vietnam.

[191] Publicly available information shows that Vietnam has many large steel producers. The largest, Vietnam Steel Corporation, supplies enough to meet demand of over 50% of the domestic construction steel industry and about 30% of domestic cold-rolled steel demand. The second largest, Hoa Phat Group is a known exporter of steel products to Canada and participant in recent anti-dumping investigations conducted by the CBSA involving steel^{Footnote 75}, as is another company listed among the largest in Vietnam, Hoa Sen Group. Another article refers to Formosa Ha Tinh Steel building a new billion dollar steel factory in Vietnam.^{Footnote 76}

[192] According to information on the record, North America is a market of particular interest to Vietnam’s steel producers. It was a major steel export market for Vietnam in 2022. Indeed, in January 2022, the Hoa Phat Group reported that Canada was a major export market for its HRS and construction steel. At the end of Q3 2023, the Hoa Phat Group also recorded the highest levels in its sales history, due in large part to exports accounting for more than one-third of its sales on a volume basis.^{Footnote 77}

[193] The Canadian producers contend that Vietnam, similar to China and South Korea, is also experiencing limited domestic demand for CRS as well as in downstream products. The Canadian producers also submitted information regarding the inefficient capacity utilization rates in the country’s steel factories. Both of these factors increase pressure for CRS producers to find alternative markets for their products.

[194] There are some mixed reviews in terms of the forecast for the next 12-24 months terms of Vietnamese domestic economic conditions. Vietnam Plus reports that despite sluggish performance driven by a fall in steel prices, experts are optimistic about the steel industry’s recovery in 2024 as the Government's policies and the revised Land Law are put in place to support the realty market and the construction industry.^{Footnote 78}

[195] Weak steel demand is having an impact on the financial results of Vietnamese steel producers. VN Steel and Pomina, two of the largest Vietnamese CRS producers, suffered a significant year-on-year decline in their net profits in H1 2023. Based on publicly available information, VN Steel reported a net revenue decrease of nearly 31% and Pomina reported an over 70% decrease in net revenue.^{Footnote 79}

[196] Weak domestic demand and low profits may incentivize Vietnamese CRS producers to increase exports. Vietnamese producers can decrease average costs which would benefit not only their export sales but also their domestic financial performance.

[197] In 2022, inflationary pressures stemming from the Russia-Ukrainian war led Vietnam’s central bank to implement restrictive monetary policies and raise interest rates. Consequently, more than 1,200 of Vietnam’s real estate projects worth approximately US$34 billion were suspended, and developers have reportedly struggled to make repayments due to heightened lending rates. Overall uncertainty about interest rates and weak earnings growth are factors that contribute to building pressures on debtors in the real estate sector. This combination of measures and lack of demand in real estate sales serve as downward pressures on the real estate sector, in turn depressing the construction industry, which consumes CRS. This explains, in part, the decline in Vietnam’s CRS consumption.^{Footnote 80}

[198] The price declines noted by the Canadian producers reflect weakening demand in Vietnam and could increase the likelihood of producers dumping CRS into export markets to sustain production. Should the finding expire, Canada would be particularly attractive, given Vietnam exporters’ limited access to the US and Mexico, among other countries.

[199] It is also noteworthy that since 2018, the United States has made three anti-circumvention determinations against Vietnamese CRS and related products that used substrate from China or South Korea. These measures show the Vietnamese exporters continued interest in the North American market and will further contribute to the diversion of CRS to Canada if the finding expires. Further, it suggests that these three countries have operated in an interconnected manner to undermine a US trade remedy.^{Footnote 81}

Determination regarding likelihood of continued or resumed dumping: Vietnam

[200] Based on information on the record regarding the sizable Vietnamese steel companies with ambitious export goals, the indications of limited demand domestically as well as in other export markets, and the existence of trade measures by other jurisdictions, the CBSA has determined that the expiry of the finding is likely to result in the continuation or resumption of dumping of CRS into Canada from Vietnam.

Parties contending that continued or resumed subsidizing is likely

[201] The Canadian producers made representations collectively through their case brief in support of their position that subsidizing from the subject countries is likely to continue or resume should the finding expire. Accordingly, they argue that the countervailing measures should remain in place.

[202] The main factors identified can be summarized as follows:

• WTO notifications
• Countervailable subsidy programs
• Previous subsidy determinations made by Canada and the US

China^{Footnote 82}

[203] The Canadian producers are of the opinion that CRS producers located in China benefit from substantial subsidies conferred by various levels of government and if the finding is not renewed, subject goods exported to Canada from China will continue to benefit from the Government of China (GOC) countervailable subsidies.

[204] They refer to China’s most recent notification on subsidies to the WTO in 2021, where 71 subsidy programs were listed as being provided at the central government level, and an additional 36 categories of sub-central government level subsidies were listed. However, China is past due on its updated WTO subsidy notification for 2022 and 2023, and WTO member countries have repeatedly expressed concern that China has not yet submitted a complete subsidy notification since joining the WTO more than 20 years ago.

[205] The Canadian producers refer to recent CBSA subsidy determinations that have occurred involving China since the CRS finding was put in place such as Wind Towers, Container Chassis and Upholstered Domestic Seating. They include an appendix that details CBSA subsidy determinations since 2018 on Chinese downstream steel products and other consumer goods and highlight numerous subsidy programs that are identical to the subsidy programs determined countervailable by the CBSA in its original CRS final determination, in addition to new subsidy programs.^{Footnote 83} They suggest that these post 2018 determinations show that not only do the originally determined CRS subsidies continue to exist, but that additional subsidies may benefit CRS producers.

[206] The Canadian producers point to the fact that in addition to the list of US DOC CVD findings involving China, the US DOC completed an expedited sunset review determination in August 2021 regarding the countervailing duty order on CRS originating from China. The US DOC identified 48 subsidy programs attributable to Chinese CRS producers. Further, it was concluded that the revocation of the order would likely result in the continuation or recurrence of countervailable subsidies at rates exceeding 256% for all listed Chinese producers/exporters.^{Footnote 84}

[207] They go on to reference several publicly available annual reports of Chinese steel companies that highlight details concerning ongoing subsidy programs available from the GOC. For example, Ansteel and Boasteel, both large Chinese CRS producers, reported several government grants and support funds in their respective 2022 annual reports.^{Footnote 85}

[208] The Canadian producers allege that these are only the subsidies that have been reported in their financial statements and submit that it is likely that Chinese producers receive other subsidies which are not transparently disclosed in their financial statements.

South Korea^{Footnote 86}

[209] The Canadian producers are of the opinion that CRS producers located in South Korea benefit from substantial subsidies conferred by various levels of government and if the finding is not renewed, subject goods exported to Canada from South Korea will continue to benefit from the Government of South Korea (GOK) countervailable subsidies.

[210] They contend that South Korea’s most recent WTO subsidy notification in 2023 exhibits that South Korean CRS producers still benefit from countervailable subsidies in Free Trade Zones. Specifically, the program “Support for Free Trade Zones” states that the GOK provides subsidies in the form of government grants “for the construction of standard factories for use by companies in Free Trade Zones.” The amount of grants under this program according to the GOK was over KRW 5.1 million in 2021, and over KRW 9.2 million in 2022.

[211] Since the CBSA’s original CRS finding in 2018, the US DOC completed an expedited sunset review determination in 2021 regarding the countervailing duty order on CRS originating from South Korea and conducted an administrative review in 2023 on CRS from South Korean companies Hyundai Steel and POSCO.

[212] In the 2021 expedited sunset review, the US DOC concluded that the revocation of the order would likely result in the continuation or recurrence of countervailable subsidies. In the 2023 administrative review, the US DOC issued their preliminary decision that during the period of review from January – December 2021, CRS from South Korean companies Hyundai Steel and POSCO benefited from countervailable subsidies.^{Footnote 87}

[213] They go on to reference several publicly available annual reports of Korean steel companies that highlight details concerning ongoing subsidy programs available from the GOK. For example, POSCO and Dongkuk, both large Korean CRS producers, reported several government grants and support funds in their respective 2022 or 2023 reports.^{Footnote 88}

Vietnam^{Footnote 89}

[214] Similarly, the Canadian producers are again of the opinion that CRS producers located in Vietnam benefit from substantial subsidies conferred by various levels of government and if the finding is not renewed, subject goods exported to Canada from Vietnam will continue to benefit from the Government of Vietnam (GOV) countervailable subsidies.

[215] The Canadian producers refer to recent CBSA subsidy determinations that have occurred involving Vietnam on downstream steel products and other consumer goods since the CRS finding was put in place such as COR and UDS. They highlight numerous subsidy programs in these findings that are identical to the subsidy programs determined countervailable by the CBSA in its original CRS final determination, in addition to new subsidy programs. They suggest that these post 2018 determinations show that not only do the originally determined CRS subsidies continue to exist, but that additional subsidies may benefit CRS producers.

[216] It is pointed out that while the US DOC did not issue a subsidy determination against CRS from Vietnam, they did issue a subsidy determination in August 2020 for Wind Towers from Vietnam, a steel product that is produced primarily from flat-rolled steel. The US DOC found that Vietnamese Wind Tower companies benefitted from 10 countervailable subsidy programs.^{Footnote 90}

[217] They also point to a policy initiative from the GOV that aims to stand up a systemic investment plan to support the country’s steel industry called “Vietnam steel industry to 2030, vision 2050.”

[218] The Canadian producers submit that existence of this program increases the likelihood that Vietnamese CRS producers will export subsidized goods to Canada if the finding expires.

Parties contending that continued or resumed subsidizing is unlikely

[219] No exporters contended that continued or resumed subsidizing is unlikely. The CBSA received no comments from the GOC, the GOK, nor the GOV as part of this expiry review.

China

[228] In the CRS original investigation, the CBSA found that Chinese CRS producers and exporters benefitted from 31 subsidy programs. A list of the 31 Chinese subsidy programs found during the original investigation is below:

Preferential loans and loan guarantees

• Loans from State-Owned Banks at Preferential Rates
• Loan Guarantee through the Government of China/SOE Banks/Public Bodies
• Debt and Interest Forgiveness on Loans from State-Owned Banks
• Preferential Export Financing and Export Credit Guarantee/Insurance

Grants and grant equivalents

• Insurance Grants
• Design, Research and Development Grants
• Export Performance Grants
• Performance Award Grants
• Reductions in Land Use and/or Rental Fees
• Grants for the Retirement of Capacity
• Grants for Relocating Production Facilities
• Award for Tax Payments
• Grant - Patent Assistance/Award
• Grant - Special Fund for Fostering Stable Growth of Foreign Trade
• Interest payment subsidy for special projects
• Interest subsidy for the importation of encouraged products and technology
• Financial Subsidy from various levels of governments

Preferential tax programs

• Corporate Income Tax Exemption and/or Reduction in Special Economic Zones (SEZs) and Other Designated Areas
• Corporate Income Tax Reduction for New High Tech Enterprises (“NHTE”)
• Corporate Income Tax Reduction for Newly Profitable Enterprises
• Municipal/Local Income or Property Tax Reductions
• Preferential Tax Policies for Foreign-Invested Enterprises (FIEs)
• Preferential Tax Policies Related to Research and Investment

Relief from duties and taxes

• Offsets to Taxable Income Related to Purchases of Domestic Machinery
• Exemption or Refund of Tariff and Import Value-Added Tax (VAT) for Imported Technologies and Equipment
• Relief from Duties and Taxes on Imported Material and Other Manufacturing Inputs
• Offset of Taxable Income on Purchases of Domestic Equipment
• Deed Tax Exemption for SOEs Undergoing Mergers or Restructuring

Goods/services provided by the government at less than fair market value

• Acquisition of Government Assets/Inputs at Less than Fair Market Value
• Provision of Land for Less than Adequate Remuneration by Government
• Debt-to-Equity Swaps for Less than Fair Market Value

[229] Since the CBSA’s original determination concerning CRS from China, it issued two final subsidy determinations for downstream flat-rolled steel products from China: Wind Towers and Container Chassis. The GOC did not submit a complete subsidy questionnaire response in either proceeding.

[230] In Wind Towers the CBSA determined that exporters received countervailable benefits from 27 subsidy programs. Eleven of these 27 subsidy programs were also found as countervailable subsidy programs in the CBSA’s CRS determination. CRS producers may also benefit from some of the other programs.

[231] In Container Chassis the CBSA determined that the sole cooperative exporter received countervailable benefits from 42 subsidy programs. Two of these subsidy programs were also found as countervailable subsidy programs in the CBSA’s CRS determination. CRS producers may also benefit from some of the other programs.

[232] In the May 2023 Stainless Steel Sinks expiry review decision, the CBSA considered in its likelihood of resumed/continued subsidization analysis that recent subsidy determinations on other Chinese consumer goods sectors, namely UDS and Mattresses, as evidence that stainless steel sink producers in China likely continue to benefit from GOC subsidy programs.^{Footnote 92}

[233] Although the CBSA has not had participation from the GOC in recent subsidy proceedings, the GOC has made recent notifications to the WTO of its subsidy programs, including one in July 2023 that included an extensive list of subsidies.

[234] As pointed out by the Canadian producers, recent US DOC conclusions regarding China’s continued subsidization of flat rolled steel exports to North America suggests that Chinese CRS exporters likely continue to benefit from subsidies.

[235] Consequently, the record is clear that since the final determination of the original investigation and throughout the period of review, the GOC has made subsidy programs available to producers/exporters of CRS in China.

Determination regarding likelihood of continued or resumed subsidizing: China

[236] Based on the information on the record in respect of the continued availability of subsidy programs for CRS exporters in China and the countervailing measures against China steel products and other consumer goods in Canada and in the US, the CBSA has determined that the expiry of finding is likely to result in the continuation or resumption of subsidizing of subject goods from China.

South Korea

[237] In the CRS original investigation, the CBSA found that Korean CRS producers and exporters benefitted from 27 subsidy programs. A list of the 27 subsidy programs found during the original investigation is below:

Energy savings and other green programs

• Management of Electricity Load Program
• Green Subsidies: GOK Subsidies for “Green Technology R&D” and its Commercialization
• Modal Shift Grants

Preferential tax programs

• RSTA Article 10(1)(2): Research, Supply, or Workforce Development Expense Tax Deductions for “Core Technologies”
• RSTA Article 104(14): Tax Payment for Third-Party Logistics Operations
• RSTA Article 104(5): Special Tax Credit for Payment Records
• RSTA Article 120: Acquisition and Property Tax Benefits to Companies Located in Industrial Complexes
• RSTA Article 22: Tax Exemption on Investment in Overseas Resources Development
• RSTA Article 24: Tax Credit for Investment in Productivity Increase Facilities
• RSTA Article 25: Tax Credit for Investment in Facilities for Environment or Safety
• RSTA Article 30: Tax Program for Special Depreciation
• RSTA Article 78(4): Tax Reduction and Exemption for Industrial Complexes

Preferential loans and loan guarantees

• KEXIM Export Factoring
• KEXIM Export Loan Guarantees
• KEXIM Import Financing
• KEXIM Overseas Investment Credit Program
• KEXIM Short-Term Export Credits
• KEXIM Trade Bill Rediscounting Program
• Korea Development Bank (KDB) Short-Term Discounted Loans for Export Receivables
• Korean Trade Insurance Corporation (K-SURE) Export Credit Guarantee
• Long-Term Loans from the Korean Resources Corporation (KORES) and the Korea National Oil Corporation (KNOC)
• Dongbu's Debt Restructuring

Goods/services provided by the government at less than fair market value

• Reductions of Lease Fees and other Financial Support in FEZs
• Custom Duties Reduced or Exempted
• Export Insurance through the Korea Trade Insurance Corporation (K-Sure)

Grants and grant equivalents

• Sharing of Working Opportunities/Employment Creating Incentives

Relief from duties and taxes in inputs, materials and machinery

• GOK Facilities Investment Support under RSTA Article 26

[238] Although the CBSA has not had subsidy determinations involving South Korea since the CRS finding was put in place, the GOK has made recent notifications to the WTO of its subsidy programs, including one in 2023 that included a list of subsidies, some of which may benefit producers and/or exporter of CRS.

[239] For example, in the CRS original investigation, the CBSA determined that the GOK provided countervailable subsidies to South Korean CRS producers through other financial support in Free Economic Zones (a type of Free Trade Zone). However, at the time it was stated that it was only a possibility that the GOK provided cash grants in Free Economic Zones to cover “factory and facility construction costs.” The program “Support for Free Trade Zones” in South Korea’s most recent WTO subsidy notification suggests that South Korean companies operating in Free Trade Zones do indeed receive GOK grants to cover factory construction costs.^{Footnote 93}

[240] As pointed out by the Canadian producers, recent US DOC conclusions regarding South Korea’s continued subsidization of flat rolled steel exports to North America suggests that Korean CRS exporters likely continue to benefit from subsidies.

[241] For example, in the 2021 expedited sunset review, US DOC also identified 55 subsidy programs attributable to South Korean CRS producers, and 25 of these subsidy programs were included in the CBSA’s original CRS determination, indicating that a vast majority of GOK subsidy programs continue to exist for South Korean CRS producers/exporters.

[242] In addition to CRS, the US DOC issued positive countervailing duty determinations during the period of review for other flat rolled and related steel products originating from South Korea including Corrosion-Resistant Steel, Hot-Rolled Steel, and Carbon and Alloy Steel Line Pipe. In Corrosion-Resistant Steel, the US DOC preliminarily found that South Korean producers KG Dongbu Steel Co., Ltd. and Hyundai Steel benefitted from 12 GOK countervailable subsidy programs.^{Footnote 94}

[243] Consequently, evidence suggests that since the final determination of the original investigation and throughout the period of review, the GOK has made subsidy programs available to producers/exporters of CRS in South Korea.

Determination regarding likelihood of continued or resumed subsidizing: South Korea

[244] Based on the information on the record in respect of the continued availability of subsidy programs for CRS exporters in South Korea and the countervailing measures against Korean steel products in the US, the CBSA has determined that the expiry of the finding is likely to result in the continuation or resumption of subsidizing of subject goods from South Korea.

Vietnam

[245] In the CRS original investigation, the CBSA found that Vietnamese CRS producers and exporters benefitted from 12 subsidy programs. A list of the 12 subsidy programs found during the original investigation is below:

Relief from duties and taxes

• Exemptions of Import Duty
• Refunds of Import Duty
• Exemption/Reductions of Land Rent, Tax and Levy
• Program Incentives on non-agricultural Land Use Tax

Preferential loans and loan guarantees

• Export and Import Support in Forms of Preferential Loan, Guarantee and Factoring

Preferential tax programs

• Enterprise Income Tax Preferences, Exemptions and Reductions
• Accelerated Depreciation of Fixed Assets
• Establishments Dealing with Exported Goods

Grants and grant equivalents

• Investment Support
• Export Promotion Program
• Grants to Firms that Employ More than 50 Employees
• Assistance to Enterprises Facing Difficulties due to Objective Reasons

[246] Since the CBSA’s original determination concerning CRS from Vietnam, it issued one final subsidy determination for a downstream flat-rolled steel product from Vietnam in COR. Another subsidy determination on a Vietnamese consumer good was put in place concerning UDS.

[247] In COR the CBSA determined that exporters received countervailable benefits from ten subsidy programs. Nine of the ten subsidy programs were also found to be countervailable subsidy programs in the CBSA’s CRS determination. As noted previously, many CRS producers also produce COR, providing a reasonable indication that the sector is still benefitting from subsidies.^{Footnote 95}

[248] In UDS, the CBSA found that Vietnamese producers and exporters benefited from 15 subsidy programs, and 10 of these 15 subsidy programs were also found as countervailable subsidy programs in the CBSA’s CRS final determination.

[249] In the June 2023 copper pipe fittings expiry review, the CBSA found that evidence on the record, including information from the GOV, demonstrated the likelihood of continued subsidization of Vietnamese subject good producers.^{Footnote 96}

[250] As pointed out by the Canadian producers, recent US DOC conclusions regarding Vietnam’s continued subsidization of flat rolled steel exports to North America suggests that Chinese CRS exporters likely continue to benefit from subsidies.

[251] For example the US DOC issued a subsidy determination in August 2020 for Wind Towers from Vietnam, a steel product that is produced primarily from flat-rolled steel. The US DOC found that Vietnamese Wind Tower companies benefitted from 10 countervailable subsidy programs.^{Footnote 97}

[252] The US DOC also conducted an expedited sunset review in July 2023 for a different steel product, steel wire hangers from Vietnam, and determined that revoking the finding would likely lead to a continuation or recurrence of countervailable subsidies. The US DOC rendered this determination due to an absence of evidence on the record that the four subsidy programs from the original finding had been terminated or suspended. This subsidy finding has been in place since 2013.^{Footnote 98}

[253] Consequently, evidence suggests that since the final determination of the original investigation and throughout the period of review, the GOV has made subsidy programs available to producers/exporters of CRS in Vietnam.

Determination regarding likelihood of continued or resumed subsidizing: Vietnam

[254] Based on the information on the record in respect of the continued availability of subsidy programs for CRS exporters in Vietnam and the countervailing measures against Vietnamese steel products in the US, the CBSA has determined that the expiry of the finding is likely to result in the continuation or resumption of subsidizing of subject goods from Vietnam.