ITC finally acts to protect America from unfair trade

ITC finally acts to protect America from unfair trade

Last week’s 5-0 vote by the International Trade Commission to impose tariffs on Chinese pipe being sold in the U.S. market was a clear signal that the United States is no longer willing to be the dumping ground of artificially underpriced products. The ITC action was welcome, if overdue, and should be the first in a line of victories for U.S. companies and workers who are the victims of Chinese predatory trade policies.

The evidence in the pipe case brought by Allied Tube Conduit, IPSCO Tubulars Inc., Northwest Pipe Co., Sharon Tube Co., Western Tube Conduit Corp. and Wheatland Tube Co. and the United Steelworkers of America was overwhelming. China was actually selling pipe in the United States at a price below the cost of the raw materials to make it.

Obviously, the Chinese government made a decision that it was willing to sell the pipe here at below cost, which had the immediate effect of keeping Chinese workers on the job and the long-range effect of destroying the U.S. domestic pipe industry. China was not only exporting pipe to the United States, it was exporting unemployment, a fact to which hundreds of displaced workers in the Mahoning and Shenango valleys can attest. Some 250 workers lost their jobs when Sharon Tube closed a plant in Sharon, Pa. That company now is part of Wheatland Tube, which has 1,300 employees at plants in Wheatland, Pa., Sharon, Warren and Niles.

In less than five years, China’s standard pipe exports to the United States exploded from 9,000 tons in 2002 to 400,000 tons in 2006 — a 40-fold increase.

But it has taken till now, mid-2008, to successfully make the case in Washington.

Broader implications

The pipe involved in this case is known as standard pipe and is used for plumbing applications, heating and air conditioning, sprinkler systems, fencing and construction. But the ruling is important to other U.S. manufacturers because it finally sends a message that the United States is prepared to protect its companies and citizens from unfair trade practices.

There is no question that some U.S. industries benefit from trade with China. But there is also no question that China continues to manipulate its currency to gives itself a trade advantage and that, on balance, the United States is buying far more from China than China is buying from the United States.

In 2007, that balance of trade deficit between the United States and China was $256 billion dollars. At that rate, very four years, China enjoys a $1 trillion trade advantage over the United States. That’s nearly $850 per year for every man, woman and child in the United States.

President Bush once suggested that the way to cut the deficit was for U.S. citizens to buy fewer Chinese goods. While it is true that we could all be more careful in making discretionary purchases, a deficit of the magnitude that has come to exist between the United States and China must be addressed in Washington.

China now accounts for nearly a third of the trade deficit that the United States has with the rest of the world, and much of the other $500 billion is being amassed with oil-producing countries. That deficit, too, will require the combined attention of individuals and the government.