"Victory In The Battle Against Chinese Imports"

Pipe is piled outside the Wheatland Tube Co. plant on Council Avenue in Wheatland. Wheatland Tube and five other American pipe producers are expected to learn this morning whether they will prevail in a trade case on Chinese pipe imports.
Michael Roknick/Herald

U.S. steel pipe manufacturers, who have been battling a surge in imports from China, won a major victory Friday when the International Trade Commission cleared the way for the imposition of stiff penalty tariffs for the next five years.

The commission voted 5-0 that the U.S. industry was being harmed by the import of circular steel pipe. The decision marked the first time a U.S. industry has won a decision to impose tariffs on a Chinese product based on the argument that the Chinese government was unfairly subsidizing a Chinese industry.

The ruling means penalty tariffs ranging from 99 percent to 701 percent will be imposed on Chinese imports of circular welded pipe, a form of pipe used in a variety of construction jobs, such as home plumbing and sprinkler systems.

For more than two decades, the U.S. government had refused to consider subsidy cases against the Chinese government because China was classified as a non-market economy.

However, the Bush administration, facing increasing anger over soaring trade deficits with China, reversed course last year and announced it would treat China in the same way as other countries in disputes involving government subsidies.

The pipe case is the first to clear all the government hurdles for the tariffs to go into effect. Last year, the Commerce Department imposed penalty tariffs on imports of Chinese glossy paper, but the trade body blocked the tariffs by ruling that the domestic industry had not proven it was being materially harmed by the imports.

In the pipe case, the Commerce Department found the Chinese government was providing unfair subsidies. It also found that the pipe was being sold in this country below the cost of production, a practice known as dumping. The penalty tariffs for the government subsidies, known as countervailing duties, and the antidumping tariffs were upheld by the trade commission vote.

Chinese exports of circular pipe have exploded since 2002, rising from 10,000 tons that year to 750,000 tons in 2007. The U.S. industry said the increase in imports had resulted in the loss of 500 pipe worker jobs, representing about one-quarter of the work force.

Plants making circular welded pipe, also known as standard pipe, are located in 13 states — Alabama, Arizona, Arkansas, California, Illinois, Iowa, Kansas, Missouri, Ohio, Pennsylvania, Tennessee, Texas and Wisconsin.

The case before the government was filed by six pipe producers and the United Steelworkers union, whose president, Leo Gerard, called the commission ruling a major victory that should send a clear message to China and to politicians in this country.

"China is a trade cheat," Gerard said in a conference call with reporters. "They undermine the market, depress prices and destroy jobs."

Gil Kaplan, a lawyer representing the pipe companies, predicted the ruling could be the first of a wave of victories by U.S. companies battling Chinese imports.

"This decision marks a fundamental turning point in the U.S.-China trade relationship," Kaplan said. "The subsidies that the Chinese are giving a whole host of their manufacturing industries are a big reason the U.S. trade deficit has been growing so rapidly. This is the first time the United States is standing up and saying we are not going to put up with this and we will impose duties to offset the subsidies."

Wang Baodong, a spokesman for the Chinese embassy in Washington, said China had not decided what its next step would be. One possibility would be for China to file a case challenging the penalty tariffs before the World Trade Organization.

The USITC is an independent, nonpartisan, quasi-judicial federal agency. Established by Congress in 1916 as the U.S. Tariff Commission (the Trade Act of 1974 changed its name to the U.S. International Trade Commission), the agency has broad investigative powers on matters of trade. The USITC is a national resource where trade data are gathered and analyzed. The data are provided to the President and Congress as part of the information on which U.S. trade policy is based.

USITC activities include:

• determining whether U.S. industries are materially injured by reason of imports that benefit from pricing at less than fair value or from subsidization;
• directing actions, subject to Presidential disapproval, against unfair practices in import trade, such as patent, trademark, or copyright infringement;
• making recommendations to the President regarding relief for industries seriously injured by increasing imports;
• advising the President whether agricultural imports interfere with price-support programs of the U.S. Department of Agriculture;
• conducting studies on trade and tariff issues and monitoring import levels; and,
• participating in the development of uniform statistical data on imports, exports, and domestic production and in the establishment of an international harmonized commodity code.

The USITC is NOT a policymaking body. It is NOT a court of law. It does NOT negotiate trade agreements.

      Though I am an advocate for "free trade" in this economically  globalized economy, such "free trade" must be in the best interest of America, as well as the nation America is trading with. China has become an economic juggernaut in the global economy, in large part because the Chinese government subsidizes many of China's manufacturers, enabling Chinese manufacturers to unfairly underbid American manufacturers. The US steel industry has particularly been hard hit by Chinese imports. The United States International Trade Commission has approved the US imposing very stiff tariffs on the Chinese steel pipe imports, after a couple of decades of soaring trade deficits with China. As a libertarian, the question must be asked, why did the House Of Representatives need the approval of the International Trade Commission in the first place because the Constitution gives The House Of Representatives the power  regulate trade and set tariffs on imports and exports? China can go complain to the World Trade Organization all day long but this is America and we can put tariffs on whatever or whomever  the Congress deems necessary. Now that the Bush Administration is finally on the right track, as far as unfair Chinese imparts are concerned, the next Presidential Administration can begin to whittle down the tremendous trade deficit our country has with the "trade cheat" China. A Libertarian President would abolish the United States International Trade Organization along with the Federal Reserve Banks. Neither Obama or McCain will go that far but will continue the unconstitutional and economically damaging relationship with the banking cartel that has co-opted the American government, as I see it.

tags: business  capitalism  china  takebackamerica  federal reserve banks  the fed  america  us  free enterprise  the economy  

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