Trade Commission: Chinese Subsidies of Steel Pipe Threaten U.S. Firms

Article excerpt

Steel industry officials praised the U.S. government's decision Wednesday to penalize China for exporting subsidized pipe that has damaged the pipe industry, causing thousands to lose their jobs.

The International Trade Commission's unanimous vote sets the stage for the Department of Commerce to levy duties against Chinese pipe makers and exporters in one of the largest steel trade disputes in U.S. history. The duties will range from 10.36 percent to 15.78 percent above the prices the steel pipe for the oil and natural gas industries were being sold for in the U.S. market.

About 2 million tons of the Chinese pipe, worth about $2.7 billion, were sold in the United States last year, the Commerce Department said. The flood of imports continued in the first five months of this year as 740,000 tons of Chinese pipe were shipped into the country, industry officials said.

U.S. Steel officials estimate about 2,400 steelworkers have been laid off this year as a result of the slowdown in the pipe- producing industry.

"This enormous surge of unfairly traded goods resulted in an overhang of inventory that crippled the domestic industry," pushing production down by about 70 percent, U.S. Steel officials said.

Roger Schagrin, counsel for the United Steelworkers and five steel manufacturers, said the decision could enable the steel industry to ramp up production and rehire workers by the second half of next year, once inventories of steel pipe are sold off. Prices for steel pipe fell by half from their peak in 2008 through September, he said, driven down by low-priced Chinese imports.

Yesterday's decision could be the first of two penalties imposed by the government against China. Officials are scheduled to decide in the spring whether the Chinese steel pipes had been sold at unfairly low prices -- known as dumping -- in the U.S. market and whether to impose additional tariffs up to 96 percent.

"We are fed up with China's constant cheating and false claims of U.S. protectionism, when it is China that practices illegal state subsidization and dumping that seeks to destroy good jobs and fair competition under (World Trade Organization) standards their leaders agreed to abide," said United Steelworkers President Leo Gerard. …