Stopping Anti-monopoly investigation For China: Section 337 Cases
The U.S. International Trade Commission delivered a surprising decision in the US Steel Section 337 case against China. In its complaint, US Steel alleged that China was violating antitrust laws in a “conspiracy to fix prices and control output and export volumes, the threat or effect of which is to restrain or monopolize trade and commerce in the United States.” US Steel also alleged that China stole trade secrets and evaded import duties through mislabeling products and circumvention. The judge in the case, after reviewing U.S. antitrust laws, ruled that the antitrust claims cannot be pursued under Section 337 although the remaining two claims can proceed.
Because the decision is unusually complicated, Judge Dee Lord, offered a summary of her decision in layman’s language which is reprinted below.
“For many years, the United States steel industry has complained of unfair trade practices by manufacturers of Chinese steel. While such practices have resulted in the imposition of high tariffs on certain Chinese steel products, U.S. Steel seeks additional remedies. The complaint by U.S. Steel in this case attempts to use section 337 of the Tariff Act of 1930 to block all Chinese carbon and alloy steel from coming into the United States. One of the grounds that U.S. Steel relies on is the allegation that the Chinese steel industry violates U.S. antitrust laws.
“The parties accused of antitrust violations; who are the manufacturers of Chinese steel, have moved to dismiss the complaint. They say that the Chinese steel industry has not violated the antitrust laws as those laws have been interpreted and applied for the past 30 or 40 years by United States courts. Under antitrust law as currently applied in federal courts, it has become very difficult for a private party like U.S. Steel to bring an antitrust suit against its competitors. U.S. Steel accepts this but says the law under section 337 should be different than in federal courts. The dispute between U.S. Steel and the Chinese steel industry shows the conflict between section 337, which is intended to protect American industry from unfair competition, and U.S. antitrust laws, which are intended to promote competition for the benefit of consumers, even if such competition harms competitors.