WASHINGTON U.S. steel pipe manufacturers, who have been battling against a surge in imports from China, won a major victory on Friday when the International Trade Commission cleared the way for the imposition of stiff penalty tariffs for the next five years.
The commission voted 5-0 that the U.S. industry was being harmed by the import of circular steel pipe. The case opens a new avenue for beleaguered American manufacturers to seek protection against Chinese imports by alleging that the Chinese government is unfairly subsidizing its own companies.
The commission ruling means that penalty tariffs ranging from 99 percent to 701 percent will be imposed on Chinese imports of circular welded pipe, a form of pipe used in a variety of construction jobs from home plumbing to sprinkler systems and fencing.
The decision marked the first time a U.S. industry has prevailed in winning a decision to impose tariffs on a Chinese product based on the argument that the Chinese government was unfairly subsidizing a Chinese industry.
For more than two decades, the U.S. government had refused to consider subsidy cases against the Chinese government on the grounds that the United States classified China as a non-market economy.
However, the Bush administration, facing increasing anger over soaring trade deficits with China, reversed course last year and announced that it would treat China in the same way that other countries are treated in disputes involving government subsidies.
The pipe case is the first one to clear all the government hurdles for the subsidies to go into effect. Last year, the Commerce Department imposed penalty tariffs on imports of Chinese glossy paper, but the trade body blocked the subsidies by ruling that the domestic industry had not proven it was being materially harmed by the imports.