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Bush refuses to limit steel pipes from China
(Bloomberg)
Updated: 2005-12-31 10:39 US President George W. Bush rejected a request by
U.S. manufacturers and workers to impose quotas on $154 million of steel pipe
from China, saying new limits on imports would harm the economy by raising
prices for consumers.
"I have determined that providing import relief for the U.S. steel pipe
industry is not in the national economic interest of the United States," Bush
said in a statement released by the White House. Bush is in Crawford, Texas, for
the holidays.
Ipsco Inc., Tyco International Ltd. and five other U.S. companies petitioned
the administration in August to impose the quotas on Chinese imports of pipes
used in plumbing, fencing and other construction. Bush is authorized to impose
the quotas or other trade "safeguards" under the terms of China's accession to
the World Trade Organization in 2001.
The companies said in their petition that currency manipulation, export
rebate programs, subsidized expansion and the absence of worker and
environmental regulations allow China to export pipe at prices below the cost of
the raw materials.
As a result, prices in the U.S. have fallen as Chinese imports have risen.
Imports from China of "standard pipe" surged to $121 million in the first six
months of this year from $44 million in the same period last year, according to
government data.
Used in Construction
Chinese pipe imports, primarily used in construction, are due to increase
more than 60 percent from $154 million in 2004. The total domestic market for
the pipes is valued at $1.8 billion, according to the U.S. International Trade
Commission.
Bush said that more than 50 other countries also export the product to the
U.S., and imposing limits on trade from China would be "ineffective because of
the extent to which imports from third countries would likely replace curtailed
Chinese imports."
The curbs could also cost consumers five times more than it would increase
the income of domestic producers, Bush said.
Since 2002 Bush turned down three other so-called "section 421" petitions to
curb imports from China. Two additional petitions were voted down by the
International Trade Commission before they reached his desk.
"This is obviously the end of section 421. No one will ever use it again,
ever," said Roger Schagrin, a lawyer representing the U.S. petitioners.
The latest case was pressed by the United Steelworkers of America, which said
it represented 2,500 workers at factories in Arkansas, Pennsylvania and Ohio
where the pipes are made, and by lawmakers such as Senator Arlen Specter, a
Pennsylvania Republican, and Representative Marion Berry, an Arkansas Democrat.
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