President George W. Bush overruled a majority of International Trade Commissioners when he refused Dec. 30 to act upon a petition by seven U.S. steel pipe makers to place limits on Chinese-made steel pipe imports flooding the U.S. market. Steel-pipe producers wanted Bush to curb imports of circular welded non-alloy steel pipes from China to no more than 90,000 tons per year, compared to 267,468 tons in 2004 and an estimated 370,000 tons this year.

The Section 421 petition was filed in August by Allied Tube & Conduit, IPSCO, Maruichi American Corp., Maverick Tube, Sharon Tube, Western Tube & Conduit, Wheatland Tube and the United Steelworkers union. Such a petition allows businesses or other groups harmed by imports from nations that engage in unfair trade practices to ask the federal government to limit imports of the products. Congress passed the Section 421 petition process as an amendment to U.S. trade laws in 2000 in direct response to China's entrance into the World Trade Organization.

The U.S. International Trade Commission (ITC) projects the imports will grow by at least 60% this year. In a 4-to-2 vote last October, the ITC recommended Bush approve the Section 421 petition and impose import limits.

President Bush rejected their recommendation, stating, “I find that the import relief would have an adverse impact on the United States economy clearly greater than the benefits of such action.” He added that other countries currently supply steel pipe to the U.S. market, so import relief “is likely to be ineffective because of the extent to which imports from third countries would likely replace curtailed Chinese imports.”

Executives from the steel pipe industry told a Bush administration panel they could not compete against a glut of low-priced imports from China. They had argued that without relief, they would be forced to shut down plants and lay off workers. Two of the ITC commissioners recommended a quota of 160,000 tons for three years. Two others proposed a tariff-rate quota beginning at 267,468 tons in the first year and increasing 5 percent in the second year and 10 percent in the third.