The oil patch pipe war heats up

drill_pipeChina better watch where it lays its pipe.

The U.S. government has sided with U.S. steel companies — namely those that make and sell pipes used in oil and gas drilling — and will begin imposing new duties on imports of steel pipes from China.

The U.S. International Trade Commission voted Wednesday to impose duties between 10.36 percent and 15.78 percent on the pipes, which are mostly used in the oil and gas industries for drilling, well casing and . The duties are intended to offset government subsidies that the U.S. government says China is providing its steelmakers.
The Commerce Department said last month that imports of the Chinese steel pipes rose by nearly 360 percent from 2006 to 2008, when it was believed Chinese subsidies were coming on strong.
The WSJ reports:

All six commissioners ruled that imports of so-called oil country tubular goods from China, totaling $2.8 billion in 2008, injured U.S. manufacturers. The commission is made up of three Democrats and three Republicans, five of whom were appointed by the Bush administration and one by the Clinton administration.
An official in the news department of China’s Ministry of Commerce said that China “resolutely opposes” the ruling, adding that the ministry will elaborate in a full statement Thursday.

Canada levied its own tariffs against some Chinese tubular goods last month.
There are many Houston companies that could be impacted by this decision, ranging from tubular goods suppliers like Tenaris and GB Tubulars, to just about any drilling firm that passes on those drill pipe and well casing costs to their customers.
China can appeal the decision to the World Trade Organization.
This trade dispute is just one of several between China and the U.S., which have accused each other of restricting market access for goods ranging from poultry and tires to Hollywood movies.

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