China versus the U.S.: A battle over pipe tariffs

A tariff battle is being waged over steel pipe imported from China.
By Plant Engineering Staff December 11, 2007

Last month, the U.S. Department of Commerce found that the Chinese government has been providing improper subsidies on Chinese circular welded steel pipe exports to the United States.

Circular welded steel pipe products are described as standard and structural pipe used in plumbing applications, HVAC systems, sprinkler systems, fencing and construction.

In its preliminary determination, the Commerce Department will impose tariffs on China pipe exports to offset the unfair advantage of subsidies. The United States found that Chinese pipe was subsidized by an average rate of 16.59%. Individual rates ranged from a high of 264.98% down to 0% for one company.

Most Chinese producers will be subject to a duty of 16.59%. The Department of Commerce has also applied critical circumstances, determining that this duty could be applied retroactively by 90 days.

The pipe imports subject to the petition against China have surged from 10,000 tons in 2002 to more than 750,000 tons in 2007—a 6,900% increase. The result has been the loss of 500 domestic jobs, approximately 25% of the total workforce employed in this segment of the domestic pipe industry.

Treasury Secretary Henry M. Paulson Jr. and other cabinet members are preparing for the next round of a “strategic economic dialogue” beginning in Beijing on Wednesday, aimed at easing tensions. But in many cases the two nations seem to be talking past each other, aggravated by American actions like the threatened steel duties or China’s reluctance to crack down on unsafe food and toys.

At a time of heightened American anxiety over the effects of globalization, tension among manufacturing plant workers illuminates how esoteric trade disputes, where the facts are often ambiguous, usually boil down to little more than American jobs versus Chinese jobs.

For the United Steelworkers’ angle on this story, click here .

For The New York Times article on this subject, click here .