U.S. Line Pipe Producers Weighing Trade Action After Losing Major Order to Russian-Owned Company
06/12/2017 - U.S. line pipe producers said they are considering whether to file a trade complaint over Canadian-made large-diameter pipe after losing what they said is a US$100 million order to EVRAZ North America.
In a statement Monday, the American Line Pipe Producers Association said it is weighing the action because EVRAZ, Canada's only producer of large-diameter line pipe, arguably is undercutting domestic producers.
Case in point, the association said, is Houston-based Cheniere Energy Inc.'s decision to award the pipe-supply contract for its Midship pipeline to EVRAZ North America. The 200-mile pipeline is intended to link the Southeast and Gulf Coast gas markets with gas produced in Oklahoma's Anadarko Basin shale fields.
The association said the order amounted to 105,000 tons of 30- and 36-inch pipe.
“This is a serious loss, which directly affects hundreds of American manufacturing jobs,” said Willey Rein attorney Tim Brightbill, trade counsel to the American Line Pipe Producers Association. “We urge the (Trump) Administration to address the loss of this and other major line pipe sales to Russian-owned EVRAZ in Canada.”
The association said the pipemaker is “aggressively” bidding U.S. pipeline projects and accused it of undercutting U.S. producers.
“Records indicate that large-diameter pipe imported into the United States by EVRAZ in the first quarter of 2017 arrived at prices below domestic steel costs,” the association said.
The association’s assertions come as the U.S. Commerce Department studies whether steel and aluminum imports pose a risk to national security. The study, being carried out under Section 232 of the Trade Expansion Act of 1962, is a precursor to potential executive action on restricting steel and aluminum imports for reasons of national security.
The Commerce Department might release results of the study later this week, according to the Bloomberg news service. And President Donald Trump in May tweeted that he is prepared to take "major action," if it's warranted.
Meanwhile, the canned food industry on Monday urged the president to exclude tinplate from any Section 232 tariffs because it has no defense or national security applications. Canners also said domestic production is insufficient to meet demand. In 2016, domestic production accounted for 58% of demand, industry representatives said.
“Any tariff or restriction on tinplate steel would competitively disadvantage cans compared to other forms of packaging, which are not subject to tariffs,” the Can Manufacturers Institute said in a statement.