The U.S. International Trade Commission sided with U.S. steelmakers in a case over Chinese steel Wednesday, voting that U.S. industry has been damaged by a flood of imports of subsidized steel from China.In the ITC’s largest-ever steel case, all six commissioners voted in the affirmative that imports of so-called oil country tubular goods from China have injured U.S. manufacturers. The commission will provide details of its decision later Wednesday.

The ruling, which will likely result in duties on future imports of Chinese steel pipes, adds more tension to the U.S.-China trade relationship. Ties between Washington and Beijing are already frayed by the Obama administration’s imposition of duties on Chinese tire imports and China’s criticism of U.S. moves as protectionist.

Last month, the Commerce Department imposed countervailing duties on the steel pipes ranging from 10.4% to 15.8%. The ITC’s decision Wednesday allows the government to finalize those duties. The commission will make a separate decision on antidumping duties next spring.

In the case, brought by U.S. steel manufacturers and the United Steelworkers union, the domestic industry has framed its case in terms of potential job losses — thousands of steel workers have been laid off or had their mills closed. In China, job losses have been few, as Chinese mills continue to operate despite weakened world demand.

The case was filed by Maverick Tube Corp.; United States Steel Corp.; TMK IPSCO; V&M Star LP; Wheatland Tube Corp.; Evraz Rocky Mountain Steel; and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union.

Steel Grating Tariffs

It’s not just steel pipe under review. Please consider US imposes duties on China steel grating.

The US Commerce Department said on Tuesday that it has set preliminary anti-dumping duties (AD) on imports of steel grating from China, a move that might escalate trade disputes between the two countries.

The department said it “preliminarily determined that Chinese producers/exporters have sold steel grating in the United States at 14.36 to 145.18 percent less than normal value.”

As a result of this preliminary determination, Commerce will instruct US Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates.

The Commerce Department said it set a preliminary anti-dumping duty of 14.36 percent on four Chinese producers or exporters in the steel grating investigations.

All other Chinese exporters or producers received an anti-dumping duty rate of 145.18 percent, the Commerce Department said.

The new case followed US President Barack Obama’s recent decision to impose punitive tariffs on all car and light truck tires from China for three years, a move quickly denounced by China as a “serious act of trade protectionism.”

145% tariffs?!
Wow.

Who Benefits From This?

Essentially no one. Potentially a few hundred steel workers get jobs back, but everyone using those products has to pay more. Demand will slow and price pressures will increase on everyone using those products. In aggregate, more jobs will be lost as a result of these tariffs than gained.

And that is just on the surface. Think China will not react? A nice clear message would be for China to cancel plane orders from Boeing or industrial goods from GE. Even if China is not so overt in its message, it is foolish to think there will be no repercussions over this.

The rising tide of protectionism is not a good thing. It never is.

Mike “Mish” Shedlock