- The Washington Times - Thursday, December 31, 2009

The U.S. government is imposing new duties on imports of steel pipes from China, the latest sign of trade tensions between the two countries.

The case is the largest steel trade dispute in U.S. history and will impact about $2.8 billion worth of Chinese imports.

A group of U.S. steelmakers and the United Steelworkers union sought the duties in April, arguing that the Chinese steel industry was flooding the U.S. market with pipes sold at unfairly low prices, a practice known as “dumping.”

The Chinese companies also benefited from government subsidies, the U.S. industry said.

The dumping harmed the U.S. industry, USW President Leo Gerard said earlier this month, and has caused the loss of more than 2,400 jobs since the beginning of this year.

Imports of the Chinese steel pipes rose by nearly 360 percent from 2006 to 2008, according to the Commerce Department.

The U.S. International Trade Commission (ITC) voted Wednesday to impose duties between 10.36 percent and 15.78 percent on the pipes, which are mostly used in the oil and gas industries. Those duties 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 rehire 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.

The six-member ITC voted unanimously that the U.S. industry was harmed or threatened with harm by the imports.

But 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 summer 2008, only to drop below $50 less than a year later.

Mr. Porter wouldn’t comment on whether the Chinese exporters will appeal the ruling. The companies could appeal to the U.S. Court of International Trade in New York, or China’s government could take the fight to the World Trade Organization.

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