New US trade dispute over welded pipes (updated)

12 February the Commerce Department opened cases into alleged dumping of welded pipes from Canada, China, India, Korea, Turkey and Greece. The investigation came on the same day President Trump said that ‘Canada does not treat us right’ regarding trade during a press conference for his infrastructure plan.

The Commerce Department investigations are looking into duties to counter unfair subsidies by those countries. Dumping is the sale of goods below market price, usually facilitated by government subsidies or other support.

Welded carbon and alloy steel pipes more than 16 inches (15.24cm) in diameter are the focus of the cases. Water and sewage pipes made according to American Water Works Association specifications are not being investigated. Products already covered by antidumping orders are also not covered by the investigation.

The cases follow a petition by various US companies including the American Cast Iron Pipe Company and the Stupp Corporation. The companies estimate the alleged dumping margins (the number that represents the difference between the price of the dumped goods and their ‘normal’ market price) are 50.89% for Canada, 120.84-132.63% for China and 37.9% for India. 2016 imports from these countries are estimated to have valued $66 million (€53.4 million), $139 million (€122.6 million) and $26 million (€21 million) respectively.

The Commerce Department’s probe is split into two investigations: antidumping duties (AD) and countervailing duties (CVD). The AD investigation will look into welded pipe pricing and includes all six countries. The CVD case will look into possible government subsidies on the part of China, India, Korea and Turkey only. The support for alleged dumping includes export subsidies, tax incentives and subsidised loans, according to the petitioners.

Commenting in a press release announcing the investigations, Secretary of Commerce Wilbur Ross said: “With an 81% increase in trade cases initiated since President Trump took office, this Administration has made it clear that we will vigorously administer antidumping and countervailing duty laws.”

Since Trump took office, the Commerce Department has opened 94 AD and CVD investigations. 424 AD and CVD orders are currently in place to counter unfair trade practices.

On 14 February, the Department released a preliminary determination in an antidumping duty investigation into cast iron soil pipe fittings from China saying that it had found evidence of unfair market practices. The Department found that the fittings were being sold at 68.37 to 109.95% less than their fair value and said that in 2016 and has instructed US Customs and Boarder Protection to collect cash deposits from importers based on these rates. Imports of the product from China totalled $8.6 million (€6.89 million), the Department estimated. The final determination in the case will be made in late June.

For all of these cases, an International Trade Commission (ITC) investigation will be conducted simultaneously. The ITC will assess whether American industry and its workforce are being damaged by the imports. For each, if the Commission concludes that the dumping is benign then the Commerce Department will end its investigation, otherwise it will continue.

The ITC will make preliminary determinations for the welded pipes cases by early March. If the Commerce Department investigations continue, preliminary rulings for the CVD cases will be out in mid-April and preliminary rulings for the AD investigations will be out late June.

The ITC will rule on the fillings case forty five days after the Commerce Department’s final determination, if it concludes that the imports amount to dumping.

This article was updated 15/02/2018 with the Commerce Department’s 14/02/2018 introduction of antidumping duties on cast iron soil pipe fittings from China.

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