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.