Lincoln Applauds Second Decision to Protect Arkansas Steel Pipe Industry From Unfair Foreign Competition

Washington—United States Senator Blanche Lincoln (D-Ark.) today applauded a unanimous (6-0) decision by the International Trade Commission (ITC) that will protect jobs in Arkansas’s steel pipe production industry. The Commission found that Chinese companies’ practice of dumping steel pipes used in the extraction of gas and oil into the U.S. market is injuring or threatening to injure the domestic industry.

“I am encouraged to learn of this second ruling by the International Trade Commission against the Chinese pipe industry, and I know that the hardworking men and women of Arkansas’s steel pipe industry are pleased as well,” Lincoln said. “It is unfair that our workers in Arkansas have taken a hit because the Chinese haven’t been playing by the rules. We already know that since China was found guilty of subsidizing their steel pipe industry in December, domestic pipe companies have begun putting workers back on the job. This additional trade relief due to the prevention of China’s dumping practices will help ensure that additional Arkansas jobs are restored or protected.”

On December 30, 2009, the Commission determined that China was unfairly subsidizing its own steel pipe industry. It was found that in 2008, the Government of China was giving Chinese oil country tubular goods (OCTG) producers a cost advantage of $168/ton over the U.S. industry. As a result of this ruling, the Chinese are now being charged an additional tariff on steel pipe exports.

Today’s ruling against the Chinese found them guilty of dumping their steel pipe products on the U.S. market, essentially selling these products for less than it cost for them to be produced. The ruling determined that Chinese imports were undercutting U.S. producers by a margin of between 30-99 percent. This finding is of the highest value ever determined against the Chinese.

Last year, Sen. Lincoln testified before the ITC to seek trade relief for Arkansas companies Maverick Tube Corporation and TMK IPSCO, which was forced to lay off many of their workers, or cut hours or wages as a result of the unfair Chinese imports. Nucor Corporation, which has two major mills in Mississippi County and supplies the two Arkansas facilities with much of their steel plate as intermediate inputs, has also suffered because of dumped and subsidized imports from China.

Oil Country Tubular Goods (OCTG) are steel pipes used in the extraction of gas and oil. For years, dumped and subsidized imports of OCTG from China have flooded the U.S. market. From 2006-2008 alone, the volume of Chinese imports increased by 203 percent. The Department of Commerce first found that OCTG from China has been unfairly subsidized at rates ranging from 11 to 31 percent.

The combination of increased OCTG imports from China and collapsed demand for these products due to the global recession has led to a massive oversupply of inventory and the recent decline of the domestic OCTG industry.