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Department of Commerce rules in favor of domestic steel manufacturers

Norwalk Reflector Staff • Feb 12, 2014 at 2:07 PM

U.S. Sens. Sherrod Brown (D-Ohio) and Rob Portman (R-Ohio) applauded an announcement by the U.S. Department of Commerce (DOC) that it would protect Ohio-based companies such as U.S. Steel and Vallourec Star from illegal Chinese trade practices by maintaining antidumping duties (AD) and countervailing duties (CVD) on Chinese steel pipe imports.

Prior to its decision, Brown and Portman urged DOC to rule in favor of domestic steel manufacturers on a petition regarding product coverage for duties ordered on Oil Country Tubular Goods (OCTG) from China. Specifically, this case focused on whether minor alterations made to Chinese OCTG in other countries were enough to change the products’ “country of origin.” With DOC ruling against that argument, OCTG made in China and finished in other countries will still face existing trade enforcement penalties.

“The Commerce Department’s ruling is excellent news for Ohio’s workers and manufacturers like those at U. S. Steel and Vallourec Star,” Brown said. “This decision makes it clear that countries like China can’t use loopholes to circumvent international law and evade anti-dumping and countervailing duties. Our steelmakers can compete with anyone in the world, and now we’ve taken a step towards leveling the playing field and protecting domestic jobs.”

“This ruling is an important step forward in ensuring that American manufactured goods can compete with their global competitors on a level playing field,” Portman said. “This is good news to the thousands of American workers who were threatened from the risk of watered-down protections which would have allowed cheap Chinese products to flood our domestic markets.”

Brown and Portman have long championed the American steel industry and fought to ensure it can compete fairly against some illegal Chinese trade practices and in the international market. In November 2013, in advance of today’s ruling, Brown and Portman wrote their third letter to DOC urging them to protect Ohio-based companies from illegal Chinese OCTG. In December 2012, Brown and Portman led a group of senators in urging DOC to maintain AD and CVD on Chinese steel pipe imports. They also sent a joint letter on this issue in May 2013.

Also in May 2013, Brown and Portman applauded U. S. Steel’s announcement that it would consider expanding its steeling operations in Lorain. Brown’s and Portman’s efforts were vital to ensuring U.S. Steel was provided necessary relief from Chinese steel pipe imports, and as a result, could maintain its facility in Lorain or potentially expand its operations.

The November 2013 letter—led by Brown and Portman—was also signed by Senators Joe Donnelly (D-IN), Amy Klobuchar (D-MN), Carl Levin (D-MI), Al Franken (D-MN), Jeff Sessions (R-AL), Richard Shelby (R-AL), Bob Casey, Jr. (D-PA), Dan Coats (R-IN), Mark Pryor (D-AR), and Debbie Stabenow (D-MI).

That letter can be read in its entirety below:

Monday, November 25, 2013

The Honorable Penny S. Pritzker

Secretary of Commerce

U.S. Department of Commerce

1401 Constitution Avenue, N.W.

Washington, D.C. 20230

Dear Secretary Pritzker:

We are writing to follow up on an issue that continues to be of vital importance to our constituents – namely, the need for continued strong enforcement of the existing antidumping (“AD”) and countervailing duty (“CVD”) orders on oil country tubular goods (“OCTG”) from China.  The orders have provided much needed relief to our industry and workers, who were subjected to massive injury from the influx of dumped and subsidized OCTG from China in 2008 and 2009.

We understand that within a few weeks the Department of Commerce intends to issue the final results of a scope inquiry to determine whether minor finishing (such as heat treating) of OCTG from China in third countries is enough to change its "country of origin" for purposes of the AD/CVD orders and to exempt it from trade relief.  In May, the Department preliminarily determined that such minor finishing is not enough to change the country of origin of Chinese OCTG.  We applaud that ruling and greatly appreciate the hard work and extensive fact-finding and analysis that went into it.  While the preliminary scope determination was focused specifically on the finishing of Chinese OCTG in Indonesia, it nevertheless is a critical determination that confirms the original intent of the orders and has broad applicability to all potential third country processing of Chinese-origin OCTG.

As it prepares its final results, we urge the Department to keep in mind the critical importance of this issue for our workers and the U.S. industry as a whole.  The U.S. OCTG  industry believes that any finding that minor finishing of Chinese OCTG in third countries is enough to alter its country of origin would be unsupported by the evidence and would open a  large loophole in the AD and CVD orders and encourage rampant circumvention and evasion.  In this regard, we understand that it would be a relatively simple matter for Chinese producers to take advantage of the numerous finishing operations that exist around the world, or to set up new operations to evade the existing trade relief.  That outcome would be inconsistent with the purpose and scope of the existing trade orders on China, and would threaten the U.S. OCTG industry and workers with enormous additional harm.

As you know, these orders have been vitally important to the U.S. industry and American steel workers.  After being devastated by a massive wave of dumped and subsidized Chinese imports that negatively impacted this market in a matter of months, the U.S. industry is now in a fragile recovery.  Opening a new path to circumvention of the orders would severely threaten that recovery and the relief from unfair trade that our companies and workers fought so hard to achieve.

Accordingly, we urge you to make sure that the Department is interpreting these orders as intended and as needed to ensure that they are effective.

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