U.S. slaps levy on Chinese pipes

By Jennifer Liberto, senior writer


WASHINGTON (CNNMoney.com) -- The U.S. International Trade Commission voted unanimously Wednesday to impose new tariffs on imports of Chinese steel piping.

The six-member federal panel voted to approve duties ranging between 10% to 16% -- as proposed by the Commerce Department in November -- to offset Chinese government subsidies.

The steel imports to be taxed are called "oil country tubular goods." They are hollow, circular steel products, including well casings and tubing. And in 2008, the U.S. imported $2.7 billion worth of them from China, a 357% increase in volume compared to 2006, according to the Commerce Department.

Overall, the U.S. consumes about $11.5 billion worth of the steel piping, according to the commission records.

The U.S. International Trade Commission said more information would be available later Wednesday.

The U.S. and China already have a tense relationship when it comes to trade, despite visits to Beijing earlier this year by President Obama and top cabinet officials

The first shot was fired earlier this fall, when the U.S. slapped a 35% tax on imports of Chinese tires, which had accounted for roughly 50 million tires or more than one-fifth of all tires sold in America.

Chinese officials have opposed such measures, calling them protectionist. China filed a complaint against the tax on tire imports with the World Trade Organization.

The Economic Policy Institute, a liberal think tank, estimates that 2.3 million U.S. jobs were lost between 2001 and 2007 due to the Chinese trade gap.

University of Maryland professor Peter Morici has written that this trade gap "threatens to torpedo the economic recovery and keep unemployment above 10% for the foreseeable future."

But others argue that the U.S. economy benefits more than it is damaged by the relationship.

Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, said in an interview last month that there is little evidence to support that trade gaps lead to big increases in job losses.

"If it was a cause of unemployment, why wasn't unemployment rising from the late 90's all the way through to today as Chinese imports rose," he said.

In the Wednesday decision to tax the steel piping, the beneficiaries are 12 U.S. producers of steel piping, located in Alabama, Arkansas, Colorado, Iowa, Kentucky, Ohio, Oklahoma, Pennsylvania and Texas. The plants employed 5,585 in 2008.

Signaling more import taxes to come, the U.S. Commerce Department on Tuesday proposed imposing anti-dumping tariffs of as high as 145% on Chinese steel-grating imports, to offset Chinese "dumping" of the product in the United States at a "less than fair value."

-- Senior writer Chris Isidore contributed to this story To top of page

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