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Steel-import tariffs forge optimism for $1B V&M expansion
‘China has been dumping products in the United States for years,’ a legislator said.
The federal government is poised to impose new tariffs on steel pipe imported from China, which U.S. Rep. Tim Ryan says will clear the way for V&M Star Steel to make a decision on its planned billion-dollar expansion in Youngstown.
The U.S. International Trade Commission voted Wednesday to impose duties of between 10.36 percent and 15.78 percent on pipes used mostly in the oil and gas industries. President Obama still has to approve the ITC decision and determine the exact level of the tariff, Ryan said during a press conference Wednesday at the Youngstown Business Incubator.
The ITC decision resulted from a case filed by domestic producers, including V&M Star Steel and Wheatland Tube, which has several plants in the Mahoning and Shenango valleys, and by the United Steelworkers of American union.
“V&M has consistently said it would wait for this ruling before making a decision on its expansion,” said Ryan.
Domestic producers testified before the ITC that the Chinese government has been subsidizing its pipe industry so that it can unfairly dump products in the U.S. market. Dumping is selling products for less than they cost to produce.
The pipe in question is called oil country tubular goods and is used in the extraction of oil and natural gas from wells. This type of pipe is a major part of the business for both V&M and Wheatland Tube.
Youngstown Mayor Jay Williams testified on behalf of the domestic producers. He said previously that China could unfairly take over too much of the domestic market and hurt V&M, which is considering whether to invest $1 billion to expand its Youngstown mill.
While V&M is apparently looking at other sites as well as Youngstown, the federal and state governments, Trumbull and Mahoning counties and Youngstown and Girard have cooperated together to persuade V&M to expand its plant here.
What an economic shot in the arm it would be for the Mahoning and Shenango Valleys, Ryan said, who added he does not know when V&M will make its decision.
William Kerins of Wheatland Tube said tube producers testified that Chinese imports of oil country tubular goods increased more than 200 percent from 2006 to 2008. Imports slowed this year once the trade case was filed, but plenty of inexpensive inventory remains in this country, he said.
The rise in Chinese imports has resulted in layoffs at Wheatland Tube, he said. About 100 of the company’s 800 area workers are off the job, he said.
Enforcement of trade laws has already benefited Ohio workers. In September, following a June ruling by the ITC on behalf of tire workers, President Obama announced that he would enforce “Section 421” trade safeguards that protect American manufacturers from excessive imports. After the ruling, Cooper Tire & Rubber Company announced plans to add capacity to its Findlay tire plant and hire up to 100 workers, Brown said.
Governor Strickland commended the ITC for its decision and for recognizing the need for relief for U.S. and Ohio businesses and workers from unfair trade practices.
“With our state’s strong history of steel production, Ohioans and Ohio businesses deserve the chance to compete fairly and work to regain lost jobs in the steel industry,” Strickland said.
All six ITC commissioners, three Democrats and three Republicans, agreed that imports of so-called oil country tubular goods from China have injured U.S. manufacturers.
The decision comes at a time when tensions between Western steelmakers and Chinese steelmakers are at a high point. It also follows a U.S. decision a day earlier to impose preliminary antidumping duties on imports of steel-grating products from China. The world’s recession and overall drop in demand for steel products has caused steelmakers to fight for a smaller pool of customers, according to the Wall Street Journal.
Pittsburgh-based U.S. Steel Corp., and seven other producers, along with the United Steelworkers, filed a trade complaint in April against Chinese producers and exporters, claiming China’s government was subsidizing pipe-production costs.
“China has been dumping products in the United States for years. This is just leveling the playing field,” Ryan said.
Ryan said the ITC is sending a clear message that they will take significant steps against nations that dump their products in the U.S. Hopefully, over time, this will enable U.S. businesses to restore themselves, he said.
The Associated Press contributed to this report