In November 2007, Commerce Said that China Illegally Subsidized Same Products

Friday January 4, 2:39 pm ET
Washington, DC :

Six U.S. pipe makers and the United Steelworkers (USW) today applauded the U.S. Department of Commerce for its preliminary finding that Chinese producers of circular welded pipe are dumping below-cost product in the United States. The Commerce Department will impose antidumping duties on China pipe exports at an average rate of 25.67 percent. Individual company margins range from zero to 51.34 percent. These antidumping duties are in addition to the antisubsidy duties imposed by the Commerce Department on November 6, 2007, when it was determined that the government of China was illegally subsidizing Chinese pipe makers. Circular welded steel pipe products, known as standard and structural pipe, are used in plumbing applications, HVAC systems, sprinkler systems, fencing, and construction.

The pipe imports subject to the petition against China have surged from 10,000 tons in 2002 to more than 750,000 tons in 2007 -- a 6,900 percent increase. The result has been the loss of 500 American jobs, approximately 25 percent of the total workforce employed in this segment of the domestic pipe industry. Once the new tariffs are published in the Federal Register, typically within five days, importers will be required to post bonds in the amount of the dumping margins calculated by the Department. The Department of Commerce has also applied critical circumstances, determining that this duty could be applied retroactively by 90 days.

The trade suit, filed in parallel with the International Trade Commission (ITC) and the Department of Commerce on June 7, 2007, was brought by the Ad Hoc Coalition for Fair Pipe Imports From China and the United Steelworkers. The Ad Hoc Coalition includes Allied Tube & Conduit, IPSCO Tubulars, Inc., Northwest Pipe Company, Sharon Tube Company, Western Tube & Conduit Corporation, and Wheatland Tube Company. On July 20, 2007, the ITC made a finding that circular welded pipe from China is causing material injury to the U.S. industry.

Armand Lauzon, Chief Executive Officer of John Maneely Company (parent company of Wheatland Tube and Sharon Tube), said, “This important decision sends a strong message to Chinese producers that they cannot dump their excess production in our market. This has cost the industry both jobs and revenue, and we hope these provisional duties will put a stop to that.” Rick Filetti, President of Allied Tube & Conduit, stated, “Surging imports from China at prices below our raw material costs have had a significant adverse impact on our employees and on our company’s profitability. Dumping erodes both market share and pricing of U.S. producers who have done much to increase their own competitiveness over the past three years, but who cannot compete with dumped and subsidized product from China.”

Leo W. Gerard, USW President, declared, “This is an important decision today for domestic pipe and steel workers. We have seen significant layoffs in the pipe and tube industry as a result of skyrocketing China imports. Chinese producers sell at prices that vastly undercut U.S. companies meaning lost sales, lost jobs, and closed facilities. The ripple effects are enormous, as thousands of steel jobs have also been lost in the mills that supply steel to the pipe and tube producers, particularly in the Ohio Valley.”

Gilbert B. Kaplan, a partner at King & Spalding, one of the law firms representing the pipe makers, said, “We are gratified that the Department of Commerce recognized the significant unfair trade practices engaged in my the Chinese pipe producers. These duties should have an important effect on the strength of the United States pipe industry.” Roger Schagrin, of Schagrin Associates, also representing the petitioners, added, “This is an important day for the U.S. pipe industry and its workers, which until now has been forced to compete against dumped imports. Today’s decision is an important first step in the process of obtaining trade relief against unfairly traded imports from China.”

After the Department of Commerce makes final determinations in both the antisubsidy duty and antidumping duty investigations, the U.S. International Trade Commission is scheduled to complete its final investigation in the spring of 2008.