Steel dumpers beware: The U.S. government may start imposing tariffs of up to 118 percent.
The U.S. Department of Commerce ruled Friday that it found significant steel dumping of oil country tubular goods, or metal for oil and gas pipelines, by South Korea and eight other countries, proposing duties that range between 2.05 percent and 118.32 percent. The International Trade Commission is expected to decide in August whether to crack down on cheap imports that U.S. Steel has blamed for the closure of two facilities in Texas and Pennsylvania.
"The Department of Commerce's intensive investigation and final decision shows that the dumping of OCTG transpired through unfair methods and market distorting pricing which caused material harm to the American market," said U.S. Steel CEO Mario Longhi. "As a result of rising imports, United States Steel has suffered mightily – orders have been reduced, mills have been idled and jobs have been lost.
"Our only recourse against such actions was with the U.S. Department of Commerce and their ability to support the rule of law and create a level playing field for American manufacturing," he said. "We applaud their decision to prevent further gamesmanship of our laws and to secure our nation’s economy."
The ruling potentially could have a big impact on Northwest Indiana mills, since roughly about a third of the flat-rolled steel made in the region ends up being used to make pipelines for the oil and natural gas industries, said Tamara Browne, director of government affairs for Schagrin Associates, a Washington, D.C.-based law firm that prosecuted the trade case. Oil tube manufacturer Tejas Tubular Products, one of the companies to petition the federal government for trade relief, plans to open a $12.1 million well casings plant in New Carlisle in August.
Pipe manufacturers and steelmakers filed a case last year contending foreign competitors in India, South Korea, Vietnam, Thailand, Taiwan, the Philippines, Turkey, Ukraine, and Saudi Arabia dumped steel for less than what they could sell it for in their own countries. The tariffs the U.S. Department of Commerce is proposing would offset any cost advantage they would gain by selling steel below cost in the United States.
"I am pleased that the U.S. Department of Commerce has taken positive action to identify that South Korea and the other countries involved in this case are dumping their steel products in our country," U.S. Rep. Pete Visclosky, D-Ind., said. "Steelworkers are under attack every day from illegal trade, and I will continue to fight every day for a level playing field."
Visclosky and other members of Congress will testify before the International Trade Commission on Tuesday, but a final injury determination likely will not come until August.
Steelmakers and the United Steelworkers union have been campaigning for months for a crackdown on the dumping, staging rallies across the country and getting more than 210 federal lawmakers to petition for a full investigation into whether the low-cost imports violated international trade rules.
Initially, the U.S. Department of Commerce had failed to propose tariffs on imports from South Korea, which has no domestic market for metal pipeline products.
"Today is a good day for America’s steelworkers and OCTG producers, and also a good day for the U.S. economy," said Scott Paul, president for the Alliance for American Manufacturing. "The outpouring of bipartisan support from Congress and the thousands of workers who took the time to make their voices heard underscored the importance of this decision. We hope the International Trade Commission will come to the same, fact-based conclusion."