China goes after another segment of the pipe market

China goes after another segment of the pipe market

If the United States had acted more quickly and more forcefully five years ago, when China was increasing its export of common pipe to the United States by a factor of 40 from 2002 to 2006, perhaps the Chinese would have been less inclined to open a second front in its assault on American workers.

Or perhaps not. There appears to be no limit to China’s desire to gobble up segments of U.S. industry, whether it be small engines, appliances, tires or pipe.

Having crippled U.S. common pipe producers and the steel companies that provided the steel for that pipe — think Wheatland Tube and the former WCI Steel, for instance — China is now making dangerous inroads into the higher end of the pipe market, oil country tubular goods.

This is not a surprising development, and it is heartening to see that the reaction to the threat to American jobs is a bit quicker than it has been in the past. Unfortunately, preemptive action is almost impossible. By the time companies and workers have enough evidence to demand protection, sales have been affected, production lines have been idled and hundreds, if not thousands of workers have lost their jobs.

Among those speaking this week before the U.S. International Trade Commission in Washington were Ohio Gov. Ted Strickland, U.S. Sen. Sherrod Brown and U.S. Rep. Tim Ryan, 17th District, and Youngstown Mayor Jay Williams, all Democrats.

Protecting oil country pipe (OCTG) from unfair competition is important to several sections of Ohio, but none more so than the Youngstown area, home of a major producer, V&M Star.

The testimony

Gov. Strickland told the commission that the China’s overcapacity in government-subsidized steel products has the potential to flood the U.S. market for OCTG.

“We’re talking about the lives and livelihoods of hardworking Ohioans – men and women who seek only a real chance to compete,” Strickland said.

Strickland cited Youngstown’s V&M Star and Lorain’s U.S. Steel as examples of Ohio steel producers that have been affected by unfairly subsidized imports.

V&M Star was forced to lay off more than 150 workers – the first layoff in the company’s history – after completing a $100 million upgrade and expansion of their mill.

Williams told the ITC: “A favorable decision is critical to Ohio and the U.S. if we are to navigate our way out of the economic malaise that has beleaguered our citizens for far too long.”

Ryan noted that preliminary findings from the Commerce Department have proven that the Chinese subsidized their exports at margins from 11 percent to 31 percent. It increased its share of the U.S. OCTG market from 32.7 percent in 2008 to 37 percent in the first nine months of 2009.

He noted that Wheatland Tube, which saw its common pipe market consumed by cheaper imports, installed new finishing equipment to enter the OCTG business. That market is now falling to imports.

Brown noted that in two years, he has appeared before the ITC on trade cases as varied as thermal paper, tires, and hot rolled steel. Now, he said, Ohio’s steel pipe workers are having “the rug pulled out from under them due to one of the most inexcusable floods of dumped and subsidized products in history.”

The speakers were asking for protection for American companies and American workers, but they were not advocating protectionism. When another country subsidizes an industry, it is not only exporting its products, it is exporting unemployment. In this case, workers keep their jobs in China while American steelworkers lose their.

Ohio’s representatives were in Washington seeking fair trade on behalf of American industry. The Trade Commission should hear their message and act accordingly.

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