President Bush is expected to decide by Friday whether to block imports of some Chinese steel under a special trade law the administration has refused to invoke thus far.
“If he says no to this, it will be the last 421 case ever,” said Roger Schagrin, a Washington trade lawyer, referring to a section of U.S. trade law that allows industries to seek protection from surging Chinese imports.
Congress enacted the law in 2000, and China accepted the terms when it joined the World Trade Organization. The rule is seldom used, in part because U.S. industries think the Bush administration will reject any petition.
Industry and labor groups have filed six cases seeking protection. Four have made it through a review process and landed on Mr. Bush’s desk. The president has rejected three, saying trade barriers would do more harm than good to the U.S. economy. He faces a Friday deadline to make a decision on the fourth case.
Allied Tube & Conduit Corp., Ipsco Tubulars Inc., Maruichi American Corp. and other manufacturers with about 2,500 workers in eight states are seeking relief from Chinese-made steel pipe imports, which have shot up from 10,114 tons in 2002 to 257,354 tons in 2004, an increase of nearly 2,500 percent.
The U.S. factories, which make steel tubing for plumbing, sprinkler systems, fences and other construction-related uses, have shed about 20 percent of their workers since 2002.
“A lot of plants will shut down if there is no relief,” said Mr. Schagrin, who is representing the manufacturers.
Importers say the increase reflects steadily rising demand and healthy prices buoyed by a strong economy.
“I … don’t understand how the petitioners can claim that they are being hurt by imports from China. This industry is extremely profitable and … pipe prices are once again increasing,” Jerry Coibion, sales manager for MAN Ferrostaal, said at a September hearing on the case. MAN imports steel pipe from around the world and distributes it to U.S. companies.
Mr. Bush is under pressure from Congress to get tough with China as imports climb to record levels and industries, especially steel manufacturers, feel the pinch of competition.
“Our trade remedy laws are useless unless enforced. The Section 421 safeguard is the last line of defense for this struggling industry and we shouldn’t be afraid to use it,” said Rep. Phil English, Pennsylvania Republican.
Mr. English and 61 colleagues sent a Nov. 28 letter to Mr. Bush requesting that he limit Chinese steel pipe imports with a quota.
Mr. Bush, who has final say on the industry petitions under the law, has found that new tariffs or quotas on Chinese products would hurt companies that rely on imports, including small businesses. He noted that goods from other countries could replace Chinese imports, offering no relief for U.S. companies.
“I remain fully committed to exercising the important authority granted to me under Section 421 when the circumstances of a particular case warrant it,” Mr. Bush said in 2003 as he declined one petition.
Steel makers have initiated a separate case, under different rules, against steel wire rod from China.
The administration has offered China comprehensive negotiations on steel trade in an effort to head off a series of such cases that would lead to rising tensions between the two great trading nations.