Getting Serious With China -- New Pipe Tariff

The Obama administration is taking steps to begin rebalancing trade with China -- and creating JOBS. In this case it looks like China has been "dumping" steel pipes --selling at prices that are below market -- to capture business away from American companies, causing them to close factories and lay off workers. This is illegal, and the Obama administration just imposed a tariff designed to begin correcting this.

Just on the newswire, NY Times with a Bloomberg report [1],

The United States imposed duties of as much as 99 percent on steel pipes from China after American producers led by the U.S. Steel Corporation complained they were being dumped at below-market prices.

The duties on $2.6 billion in annual imports of the pipes, used in oil and gas wells, will be 36.5 percent for the 37 largest exporters, the Commerce Department said in a preliminary decision. The tariffs will be on top of separate duties announced in September averaging 21 percent to counter subsidies to Chinese producers.

From Financial Times, US slaps anti-dumping duties on steel pipe imports from China [2],

Anti-dumping duties are used when companies sell their products unfairly cheaply into foreign markets. Imports of the Chinese pipes, which are used in oil-drilling, surged 203 per cent between 2006 and 2008, according to the commerce department.

The duties range from 36.53 per cent for a select group of Chinese companies to 99.14 per cent for the rest. One manufacturer, Jiangsu Changbao Steel Tube Co, was exempted from the ruling.

. . . A final anti-dumping order will be issued if both the commerce department and the International Trade Commission decide that the imports "materially injure" the domestic industry, or at least threaten to do so.

In another sign of its muscular approach, the US this week asked for a World Trade Organisation disputes panel to investigate Chinese restrictions on exports of specialised raw materials used in industry. It was joined by the European Union and Mexico in claiming that China's restraints on some raw materials were driving up the cost of end products.

President Obama travels to China in ten days. It appears he is going there with a message that they are going to have to be a "fair and balanced" trade partner from now on.

We will post more information as it comes in.

P.S. The EU imposed tariffs on Chinese steel pipes in July [3] for this reason.