G/SCM/Q2/USA/70  
 
13 April 2017 
(17-2035) Page: 1/3 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
REQUEST FROM CHIN A TO THE UNITED STAT ES PURSUANT  
TO ARTICLE 25.8 OF THE AGREEMENT  
The following communication, dated 12 April 2017, is being circulated at the request of the 
Delegation of China . 
 
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As described below, China hereby  requests certain information from the United States under 
Article 25.8 of the WTO Agreement on Subsidies and Countervailing Measures ( "SCM Agreement ") 
relating to support programs granted or maintained by the United States for the benefit of its steel 
sector. 
According to information obtained by China, the United States is implementing or has implemented 
the following government support measures in the steel sector, which appear to provide subsidies 
as defined in paragraph 1 of Article 1 of the SCM Agreeme nt and which appear to be specific within 
the meaning of Article  2. Please provide the following information for each of the following 
programs, policies or implementing measures:  
(a) Current status of the program, policy or implementing measure;  
(b) The d epartment providing the program, policy or implementing measure;  
(c) The legal basis of the program, policy or implementing measure ；Please provide relevant laws, 
regulations and policy documents;  
(d) The specific information about the subsidy provided by t he program, policy or implementing 
measure, including the form, amount, object, duration and purpose of the subsidy.  
I. FEDERAL STEEL SUBSIDY POLICIES  
1. Pension provided for steel enterprises by Pension Benefit Guaranty  Group  
Pension Benefit Guaranty  Group ("PBGC ") is a non -profit company under the United States 
Department of Labor established based on the Employee Retirement Income Security Act of 1974 
("ERISA "). According to the law, PBGC currently provides 29000 pension guarantee schemes 
for 47 million workers and retirees. Seen from individual enterprises, 4 of the 10 enterprises that 
received the most pension payments from PBGC were steel enterprises, namely Bethlehem Steel, 
LTV Steel, National Steel and Weirton Steel. PBGC paid US$ 3.7 billion, US$ 2. 1 billion, 
US$ 1.3 billion and US$ 600 million respectively or a total of US$ 7.7 billion to the 15 single 
employer pension insurance programs of the above four enterprises, and the above insurance 
schemes have remained valid since 2003.  
From the operation  and actual payment of PBGC 's insurance program, the main beneficiaries of the 
program are primary metal manufacturing (mainly steel) and air transport sectors. Of the 
10 enterprises that received the most pension payments, 5 were from the air transport se ctor, G/SCM/Q2/USA/70  
 
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  and 4 were from the steel sector. Therefore, the application of the program in steel and air 
transport sectors was suspected to constitute de facto specificity.  
2. Subsidies provided by the Department of Homeland Security  
Since 2008, Customs and Bor der Protection under the United States Department of Homeland 
Security has paid the anti -dumping and countervailing duties levied to eligible steel enterprises in 
the form of compensation in accordance with the Continued Dumping and Subsidy Offset Act of 
2000 ( "CDSOA ") which was abolished in 2007. In the fiscal years of 2008 -2015, Customs and 
Border Protection paid US$ 29.089 million, US$ 23.625 million, USD$ 14.6 million and 
US$ 9.083  million of compensation to ArcelorMittal, US Steel, AK Steel and Nucor S teel 
respectively. In the fiscal years of 2008, 2013 and 2014, Customs and Border Protection paid 
US$ 258,000, US$  11,000, and US$ 106,000 of compensation to Gallatin Steel (which was 
acquired by Nucor Steel afterwards) respectively.  
We hold that such comp ensations were only provided to specific enterprises and therefore 
constituted de jure specificity.  
II. STATE AND LOCAL SUBSIDIES  
1. Subsidy provided by the Government of Kentucky to Gallatin Steel  
(a) For economic development programs with investments exc eeding US$ 100,000 and more than 
15 full -time jobs in specific regions, the state government may exempt specific enterprises from 
taxes according to the Kentucky Rural Economic Development Finance Authority. According to this 
program, the state government exempted Gallatin Steel from US$ 140 million of income tax and 
limited liability entity tax.  
(b) Bluegrass State Skills Corporation under Kentucky Cabinet for Economic Development supports 
eligible enterprise employees to participate in skills training in  the form of "Grant in Aid ". In 2007 -
2008, Gallatin Steel received US$ 100,000 of employee training grant each year.  
We hold that the above tax deduction and exemption program and the program supporting 
employee skills training were aimed at a specific reg ion or a specific enterprise and therefore 
constituted de jure specificity.  
2. Subsidy provided to Nucor Steel by the State of North Carolina  
The government of North Carolina adopted the "Session Law 1998 -55, Senate Bill 1569 in 1998 ". 
According to the Bil l, for the programs with investments exceeding US$ 150 million and more than 
155 full -time jobs or large -scale resource recycling programs in economic development zones and 
other specific regions, parts of the tax items levied will be returned within 10 -20 years following 
the implementation periods of the programs. Nucor invested US$ 300 million to build a steel plant 
in Hertford, North Carolina. Through tax refunds, the program enabled Nucor to obtain a total of 
US$ 161 million of government grant.  
We hold  that the tax returns were aimed at a specific region and therefore constituted de jure 
specificity.  
3. Subsidy provided to Nucor Steel by the State of Louisiana  
In 2010, Nucor received an accumulative total of US$ 255 million subsidy from the state 
gover nment, including state government grants and loans (US$ 160 million), tax deduction, 
exemption or returns (US$ 55 million), a 20 -year duty -free treatment, "the Quality Jobs Program "1 
cash back (US$ 40 million), the performance grant provided to Nucor by Lo uisiana Economic 
Development (US$ 30 million) and state bond (US$ 30 million)2, etc. 
We hold that the above support measures were aimed at a specific region and therefore 
constituted de jure specificity.  G/SCM/Q2 /USA/70  
 
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  4. Subsidy provided to the steel companies in Virgin ia by the State of Virginia  
According to Paragraph 18d of Article 22, Chapter 29 of the Code of West Virginia amended 
in 2003, the state government provided a grant of US$ 300,000 to the Putnam County 
Development Authority, and the grant was used in the ne w constructions and renovations of 
WV Steel, Poca Facility, a steel company in West Virginia.  
The program was aimed at a specific enterprise and therefore constituted de jure specificity.  
 
 
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