Whether you call it protectionism or fair trade, more industries are calling for penalties on Chinese imports.United States Steel Corp. is one of the most-recent companies to call for tariffs on goods imported from China.
The company, along with V&M Star L.P., filed on Sept. 16 antidumping and countervailing duty petitions with the International Trade Commission (ITC) regarding certain seamless carbon and alloy steel pipe imports from China.U.S. Steel and oil industry pipe producer V&M Star say China dumped 366,091 net tons of seamless pipe imports in 2008 at margins greater than 70%.
The companies allege China has provided numerous subsidies to its steel pipe industry, including below-cost loans, grants, equity infusions and tax subsidies.
"Chinese imports have led to a massive build up of inventory and have caused clear injury to domestic producers," according to a statement issued by U.S. Steel. "The threat of additional injury is only compounded by the enormous excess capacity of Chinese producers."The ITC is expected to decide by Nov. 2 whether there is reasonable indication that imported Chinese seamless pipe have caused injury to the domestic market. If the ITC affirms the petition's claims, the Commerce Department will likely make a final determination on the matter and potential actions sometime in 2010, U.S. Steel says.
The move comes amid several allegations that China has benefited from unfair trade practices. On Sept. 23, steel recycler and IW 50 Best Manufacturer Nucor Corp. filed a complaint against China claiming the country has exported bolts and other components at below-market prices. That same day three paper companies and the United Steelworkers filed an antidumping case against China and Indonesia.Earlier in the month President Obama approved a tariff on Chinese tire imports after a the USW filed a complaint.
At A Glance
United States Steel Corp.
Primary Industry: Fabricated Metal Products
Number of Employees: 49,000
2008 In Review
Revenue: $23.75 billion
Profit Margin: 8.89%
Sales Turnover: 1.48
Inventory Turnover: 8.27
Revenue Growth: 40.78%
Return On Assets: 13.51%
Return On Equity: 38.19%
In a July 28 statement, President and CEO John Surma commented on third-quarter expectations and the negative impact Chinese imports are expected to have during the current fiscal period.
"Third-quarter results for tubular are expected to show some improvement compared to the second quarter mainly due to a slight increase in shipments as customers fill limited inventory needs for certain specialized products," he said. "However, we expect an operating loss as we continue to incur idled facility carrying costs and shipments, and average realized prices continue to be depressed by the inventory glut created by a surge of unfairly traded and subsidized product from China."
As of mid-day Sept. 30, U.S. Steel's stock traded at $44.78, down 78 cents or 1.7% from the previous-day close of $45.56.
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