The U.S. steel industry filed an antidumping suit against China, covering $2.7 billion of imports, alleging that steelmakers there unfairly dumped specific types of tubular and pipe steel onto the U.S. market last year. The case, one of the biggest ever filed by the U.S. against China, is likely the beginning of a string of steel-dumping cases against China, say attorneys representing steel workers and manufacturers.What set this action into motion isn't hard to find. When steel prices were soaring worldwide, US manufacturers weren't too concerned about Chinese steel as there was plenty of demand to go around. However, with the global economy--and consequently, demand for steel--going down the tubes, American steel manufacturers are keen on protecting domestic turf from these trade evildoers. At a time when US steelmakers are cutting back, they are affronted by Chinese factories going full steam ahead, more or less. Just what will happen to all that excess production? US steelmakers are pretty certain...
"I think there are going to be a lot of trade cases, steel and nonsteel, filed against China," said Roger Schagrin, one of the lead attorneys representing the seven domestic companies and the United Steelworkers union, which filed a petition with the U.S. International Trade Commission and the Department of Commerce. "China continues exporting massive amounts of products despite decreasing U.S. demand."
Within the past two years, U.S. steel companies have won antidumping cases in four other tubes and pipes trade cases against China. U.S. steel producers win more of these antidumping cases than they lose but the punishment varies. Sometimes there is a quota and other times there are additional surcharges.
The tension between Chinese and U.S. steelmakers has grown in the past several months as the downturn in the global economy puts a strain on the import/export markets. In this weak economy, Chinese steelmakers are trying to keep their plants running as close to capacity as possible as are domestic steel producers.UPDATE 4/11: The Chinese are not taking this one in stride after already being hit with anti-dumping tariffs by the EU in recent days:
The problem is that there aren't enough steel buyers as automakers, equipment manufacturers, builders and commercial construction companies severely cut the amount of steel they need. [US] steel plants have been operating at about 50% of capacity. Steel prices have plummeted by half since last summer along with demand, leaving the world awash in steel and spurring steel-dumping allegations against China, a major exporter of steel.
The European Union this week made a preliminary determination that seamless pipe imports from China were dumped there. China exported more than 600,000 tons of seamless pipe into the EU last year.
Domestic steelmakers are concerned that the steel could now be diverted to the U.S., where prices are fetching somewhat higher prices than elsewhere in the world. "There haven't been very many [steel-dumping cases] in the last three to five years," said Mr. Phelps. "The steel industry has been very profitable, with 2006 a record for all-time profit."
Mr. Phelps said that the domestic steelmakers are simply trying to guard their own markets. "When the market takes off, the domestics have the playing field all to themselves again." The world steel market was so good for so long that it didn't matter much where steel was coming from. Just last year, there was shortage of steel as prices rose to their highest ever.
China’s government is “highly concerned” about the U.S. steel industry’s petition to the State Department and the International Trade Commission to investigate whether Chinese products were dumped in that country.Note that the EU steel tariffs have been a long time coming [1, 2, 3].
The application will have a “significant impact” on exports of Chinese steel products to the U.S., Yao Jian, a spokesman for China’s Ministry of Commerce, said in a statement posted on its Web site. “Blindly accusing importers of dumping or giving countervailing duties without proof and seeking trade protectionism won’t solve the real problems confronting the U.S. industry,” Yao said in the statement, dated yesterday.
The U.S.’s application follows the European Union’s decision to levy anti-dumping tariffs on Chinese steel products, after anti-protectionism pledges were made at the G20 meeting earlier this year. Mills in China, the world’s biggest producer of steel, benefit from subsidies for so-called oil-country tubular goods which are sold in the U.S.
The EU announced tariffs as high as 24.2 percent on steel pipes and tubes from China on April 8 to help producers including ArcelorMittal fend off cheaper imports.