U.S. producers file safeguard measure against Chinese pipe

U.S. producers file safeguard measure against Chinese pipe

After a year of enduring increasing imports, US pipe producers filed a petition for a specific safeguard measure against Chinese standard pipe. The measure is a Section 421 (the special China safeguard provision) and it differs from than the standard antidumping investigations. The International Trade Commission (ITC) will investigate the case to determine whether increased imports from China are a substantial cause of market disruption. This is a higher standard than the "material injury" standard in an antidumping investigation. If the commission finds substantial cause of market disruption, they will make a remedy recommendation, usually in the form of higher duties or quotas. However, unlike a dumping case (but similar to a 201 case), the president makes the final decision in a 421 case. For example, the garment hanger industry filed a 421 case but President Bush denied the US garment hanger industry any trade relief from Chinese hanger imports. He argued that a penalty was not in the interest of the American consumer and that many small stores would unduly suffer if they did not have access to less expensive Chinese hangers. Many analysts believe the Mr. Bush will probably choose the same route to avoid putting undue pressure on already stressed Chinese/US relations. In addition, pipe producers reported record profits last year, which will surely not help them in their case. Tuesday’s filing claims that Chinese imports of standard pipe increased by 102’861 tons or 62.4 percent between 2000 and 2004. It also claims that Chinese import market shares increased 16 percent to 16.4 percent from 2002 to the first half of 2005. The petition asks the ITC to recommend that the president impose a remedy in the form of an import quota on standard pipe from China. It suggests an initial annual quota of 90’000 tons, with an increase in the quota level of 5 percent per annum, for a period of five years. The process takes approximately 150 days from filing to the president’s remedy determination. However, with the safeguard measures, presidents typically ignore the statutory deadlines. The scope of the investigation covers certain welded carbon quality steel pipes and tubes, of circular cross-section, with an outside diameter of 0.372 inches (9.45 mm) or more, but not more than 16 inches (406.4 mm), regardless of wall thickness, surface finish (black, galvanized, or painted), end finish (plain end, beveled end, grooved, threaded, or threaded and coupled), or industry specification (ASTM, proprietary, or other), generally known as standard pipe and structural pipe (they may also be referred to as structural or mechanical tubing).