By Patrick Cooley
The U.S. International Trade Commission made what the president of Wheatland Tube Co. called a positive move for the steel industry on Wednesday by allowing duties of 10 to 16 percent on certain Chinese steel products.
The six-person commission unanimously ruled in favor of U.S. steel interests who said that Chinese steel companies were flooding the U.S. market with products sold at unfairly low prices – a practice known as “dumping” – and injuring the industry here.
The product in question is oil-country tubular goods, welded seamless pipes used to extract oil and gas from drilled wells. More than $2.7 billion worth of the product was imported to the U.S. from China in 2009.
Bill Kerins, Wheatland Tube’s president, said it is too early to tell just what impact the ruling will have on the company or the domestic steel industry, but he said it should be a positive one in years to come.
“We still have to deal with a lot of Chinese product on the ground, probably throughout next year,” he said, but, he added, “This should help level the playing field.”
Wheatland Tube was part of the group of U.S. steelmakers and the United Steelworkers union that sought the duties in April. Representatives of the company and six other pipe producers pleaded their case to the ITC in Washington D.C. earlier this week. Pennsylvania Gov. Ed Rendell, U.S. Rep. Jason Altmire, McCandless, D-4th District, and U.S. Rep. Kathy Dahlkemper, Erie, D-3rd District, also testified, saying Chinese dumping was costing the U.S. steelworkers jobs.
“The ITC’s ruling is truly great news for America’s steel industry,” Rep. Altmire said in a statement. “For years, a flood of heavily subsidized Chinese imports has placed America’s steel industry at an unfair competitive disadvantage.”
China can appeal the ruling to the World Trade Organization.
The duties imposed Wednesday are intended to offset the government subsidies that the U.S. government says China provides its steelmakers.
The ITC will decide in the spring whether to impose additional tariffs of up to 96 percent to penalize Chinese steelmakers for dumping.
Roger Schagrin, counsel for the United Steelworkers and five steel manufacturers, said the decision could enable the U.S. steel industry to ramp up production and re-hire workers by the second half of next year, once current inventories of steel pipe are sold off.
Prices for steel pipe fell by half from their peak in 2008 through September 2009, he said, driven down by low-priced Chinese imports.
Daniel Porter, a lawyer representing the Chinese steel exporters, said the U.S. industry was hurt by a boom-and-bust cycle that resulted when the price of oil soared to about $140 a barrel in the summer of 2008, only to drop below $50 less than a year later.
Higher oil prices spurred more drilling, which caused oil companies to order more of the pipes. Those orders dried up when prices fell, Porter said. “If demand collapses, that affects everyone,” he said. “It has nothing to do with imports.”
