Finding Clears Way for Hefty Duties on Chinese Pipe
Saturday, June 21, 2008
Printable FormatWall Street Journal By TOM BARKLEY
WASHINGTON -- In a big victory for U.S. pipe makers, the U.S. International Trade Commission cleared the way for hefty import duties on standard steel pipe from China.
The Commerce Department determined last month that countervailing duties of as much as 616% will be charged on the pipe, which is used in plumbing and heating, air conditioning and automatic sprinkler systems. The department also set antidumping duties of up to 85.55%. But before the duties could go into effect, the ITC was required to find, as it did Friday, that U.S. producers are being harmed by the subsidized imports.
The ruling also marks a major change in U.S. trade policy toward China. Last year, the Commerce Department started pursuing countervailing-duty cases against China after shunning investigations of alleged subsidies because it classified China as a nonmarket economy.
Friday's decision drew immediate praise from prominent China critics in Congress, including Sen. Barack Obama, the Democratic presidential candidate. "The ITC's determination today was the only responsible response," the Illinois senator said in a statement. "The United States must always use the full range of multilateral and bilateral tools to insist that China and all other nations abide by the rules that govern the economic policies of nations."
Rep. Phil English (R., Pa.), who has introduced a number of bills to toughen the U.S. stance on trade relations with China, said, "Finally, Washington has taken notice of Chinese trade abuses and has taken a critical first step to standing up for American companies and workers at risk."
Chinese officials recently threatened to take up the steel-pipe duties dispute with the World Trade Organization.
Gil Kaplan, a partner at King & Spalding who represents the U.S. pipe makers that requested the investigation, said that he believes the U.S. has "a very strong WTO case" and that the ruling marks a fundamental shift in trade relations between the two countries, which should help to narrow the U.S.'s record $256 billion trade gap with China last year.