Steel pipe industry wins against China

Modern Casting, August, 2008

U.S. steel pipe manufacturers won a major victory on June 20 when the International Trade Commission voted 5 to 0 that the U.S. steel pipe industry was being harmed by the import of circular steel pipe from China. The decision marked the first time a U.S. industry has won a decision to impose tariffs on a Chinese product based on the argument that the Chinese government was unfairly subsidizing one of its industries.

The ruling means penalty tariffs ranging from 99 to 701% will be imposed on Chinese imports of circular welded pipe. For more than two decades, the U.S. government had refused to consider subsidy cases against the Chinese government because China was classified as a nonmarket economy. However, the Bush administration reversed course last year and announced it would treat China in the same way as other countries in disputes involving government subsidies.

In the pipe case, the Commerce Department found the Chinese government was providing unfair subsidies. It also found that the pipe was being sold in the U.S. below the cost of production. The penalty tariffs for the government subsidies and the antidumping tariffs were upheld by the trade commission vote.