- The Washington Times - Friday, December 30, 2005

President Bush yesterday denied a steel industry petition to block imports from China that are threatening the jobs of almost 2,500 workers at factories in eight states.

Unions, steel makers and their allies in Congress saw the case as a test of the administration’s commitment to protect American jobs from Chinese competition. A law enacted by Congress in 2000 allows industries to ask the president to slow or stop surging Chinese imports.

Mr. Bush said new tariffs or quotas on Chinese goods would not help the companies.

“I have determined that providing import relief for the U.S. steel pipe industry is not in the national economic interest of the United States. In particular, I find that the import relief would have an adverse impact on the United States economy clearly greater than the benefits of such action,” Mr. Bush said.

The White House now has denied four such petitions, likely ending prospects that an industry will again go through the lengthy and costly procedure of compiling and filing a case.

In each case Mr. Bush said that raising barriers to Chinese-made goods would harm consumers, by raising prices, while offering little relief to U.S. manufacturers. Other foreign producers would likely step in to fill the demand, he said.

The U.S. manufacturers seeking protection were disappointed with the decision.

“They have decided they want to help the Chinese and could care less about American workers,” said Roger Schagrin, a Washington attorney representing manufacturers, concentrated in Pennsylvania and Ohio, that make pipe used in sprinkler systems, fencing and other construction-related projects.

Such Chinese-made steel pipe imports have shot up from 10,114 tons in all of 2002 to 87,890 during the first six months of 2004 and 185,019 tons in the first half of 2005. U.S. manufacturers shipped 576,579 tons of pipe in the first half of 2005, down from 798,984 tons during the same period in 2004.

Wheatland Tube, in Wheatland, Pa., already has laid off more than 200 employees and without relief, workers say more are expected across the industry.

“The writing is on the wall,” said Michael Bolt, a Wheatland pipe worker.

Other industries denied Section 421 petitions, so named for a section of U.S. trade law, include wire garment hangers, iron waterworks fittings and wheelchair parts.

McWane Inc., a Birmingham, Ala., company that made iron fittings in the United States, decided to lay off American workers and move some production to China after it lost a 421 case in March 2004.

“While this is a choice we prefer not to make, given the current administration’s denial of our petition to keep jobs in the United States, it is one we have to make for the long-term health of our business,” said Michelle Clemon, a McWane spokeswoman.

Mr. Bush’s decision is a clear signal that the Section 421 trade law is unlikely to win his approval. The message was disappointing to lawmakers who supported the measure and who represented districts with steel pipe manufacturers.

“Today’s decision severely undercuts the deterrent effect of many of our existing trade law remedies and undermines our efforts to push China to play by the rules of the global trading system,” said Rep. Phil English, Pennsylvania Republican.

But Matt McCullough, a Washington attorney who represented Chinese pipe manufacturers, concurred with the White House ruling. The spike in imports reflected rising demand, he said, noting that U.S. pipe producers have been earning healthy profits.

Information filed with the U.S. International Trade Commission shows industrywide gross profit hitting $213.9 million last year, and $74.5 million in the first half of 2005.

“There has been a lot of demand and a lot of shipments and a lot of money made by the U.S. steel industry,” Mr. McCullough said. “This was the wrong case at the wrong time.”

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