U.S. International Trade Commission (ITC) Issues Final Affirmative Vote on Antidumping and Countervailing Decisions on Circular Welded Steel Pipe From China

WASHINGTON – (Business Wire) Six U.S. pipe makers and the United Steelworkers (USW) today commended the U.S. International Trade Commission (ITC) for its affirmative decision that unfairly traded imports of circular welded steel pipe from China injured the U.S. industry and its workers.

The ITC’s decision will allow an antidumping duty order to be imposed on Chinese exports of circular welded steel pipe with duties ranging from 69.20 to 85.55 percent. The decision will also result in a countervailing duty order imposing duties that range from 29.57 to 615.92 percent, with an average subsidy rate for all respondents of 37.22 percent. These final duties were issued on May 30, 2008 by the U.S. Department of Commerce (DOC).

Today’s ITC decision marks the first time that a countervailing duty (CVD), or anti-subsidy, order has been imposed on a steel product from China, and the first time that a CVD case on China has resulted in a countervailing duty order since the Commerce Department began to initiate CVD investigations of Chinese imports in October 2006.

Chinese exports to the United States skyrocketed from 10,000 tons in 2002 to 750,000 tons in 2007 — a 6,900 percent increase. As a result of the surge in subsidized and dumped imports, U.S. producers lost market share and suffered steep decreases in profitability over the period investigated. China imports created unfavorable economic conditions, causing U.S. pipe plant closures and the loss of 500 pipe worker jobs. Approximately 25 percent of the total workforce employed in this segment of the domestic pipe industry have lost their jobs since 2002, when the import surge began.

The trade action was filed on June 7, 2007 on parallel tracks before the ITC and the DOC 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. Circular welded steel pipe products, known as standard and structural pipe, are used in plumbing applications, HVAC systems, sprinkler systems, fencing, and construction.

Barry Zekelman, President and Chief Executive Officer of John Maneely Company (parent company of Wheatland Tube and Sharon Tube), said, “The Department of Commerce decision confirms what we have been experiencing in the marketplace as a result of Chinese unfair trade practices. Large government subsidies have allowed Chinese producers to dump in our market. This resulted in reduced profitability and forced us to shut down capacity and lay off workers.”

Goro Terao, President of Western Tube & Conduit, Long Beach, California, added, “Our company’s fence tubing business was devastated by these unfairly traded imports from China, with the loss of over one-third of our volume. Fortunately, the imposition of the unfair trade duties has allowed us to regain these lost sales, to the benefit of our company and our employees.”

Leo W. Gerard, USW International President, declared, “We lost 500 good middle class jobs in this industry at a time of strong economic expansion and demand for these products. Our union has lost tens of thousands of jobs from other unfairly traded China imports, and we have pledged to work with unionized companies for strong enforcement of U.S. trade laws to stop illegal Chinese trade practices. We need to regain lost manufacturing jobs, and to reduce our massive trade deficit with China.”

Gilbert B. Kaplan, a partner at King & Spalding, which represents the pipe makers, said, “The high countervailing duty rates show that the United States will not put up with subsidization that undercuts our industries. It is only because of unfair subsidies that the Chinese steel industry has grown larger than the U.S., the EU and the Japanese industries combined. Hopefully this countervailing duty order will start to reverse this trend. With this case, the United States has taken a very strong position against Chinese government subsidies to their steel industry.” Roger B. Schagrin, of Schagrin Associates, also representing the petitioners, added, “Today’s vote at the ITC demonstrates that this industry and its workers were injured by these trade distorting practices from China. More importantly this is the first of four different steel pipe and tube cases against China and demonstrates China only became the largest pipe and tube exporter to the U.S., nearly 3 million tons in 2007, through government subsidies.”

 
Chronology of Events
 
Circular Welded Carbon-Quality Steel Pipe From China
 
Antidumping and Countervailing Duty Cases
 
 
June 7, 2007   Antidumping and Countervailing Duty cases filed with the International Trade Commission and the Department of Commerce
July 31, 2007   The International Trade Commission finds that the U.S. industry producing circular welded pipe is injured as a result of imports from China — all five Commissioners who participated found either present material injury or threat of material injury
November 5, 2007   The Department of Commerce issues its Preliminary Countervailing Duty Determination finding that the Government of China provides subsidies to Chinese pipe producers at margins ranging from 0% to 264.9%, with an average rate of 16.59%
January 3, 2008   The Department of Commerce issues its Preliminary Antidumping Duty Determination finding that the Chinese pipe producers are dumping in the U.S. market at margins ranging from 0% to 51.34%, with an average rate of 25.67%
May 13, 2008   Hearing at the International Trade Commission, with industry, labor and Congressional participation
May 29, 2008   The Department of Commerce issues its Final Countervailing Duty Determination finding that the Government of China provides subsidies to Chinese pipe producers at margins ranging from 29.57% to 615.92%, with an average rate of 37.22%
May 29, 2008   The Department of Commerce issues its Final Antidumping Duty Determination finding that the Chinese pipe producers are dumping in the U.S. market at margins ranging from 69.20% to 85.55%
June 20, 2008   Final injury determination of the International Trade Commission
   

John Maneely Company
Barry Zekelman, 216-910-3702
or
Western Tube & Conduit
Goro Terao, 310-669-2205
or
King & Spalding LLP
Gil Kaplan, 202-661-7981
or
Schagrin Associates
Roger Schagrin, 202-223-1700
or
USW
Gary Hubbard, 202-256-8125