U.S. pipe makers were pleased with the recent strict penalties that were imposed upon Chinese made drill pipes for oil drilling. The Commerce Department will raise penalties and impose a nearly 20 percent tariff on imports. The ruling concluded that China was unfairly subsidizing the steel industry and therefore selling the products below market value, causing U.S. companies a painful price disadvantage.
Executive director of the Alliance for American Manufacturing, Scott Paul
, stated, “Our manufacturing sector alone has lost 5.5 million jobs in just the last decade – with 2.4 million lost or displaced as a direct result of our massive trade deficit with China. We risk losing our competitive edge as a nation unless strong enforcement of our trade laws occurs when cheating exists.” The ruling will slow down imports from China and help domestic producers become more competitive.
The graph below shows a two year trend of imports for drill and line pipe used for gas and oil drilling. Imports from China have dropped significantly in the last year and will likely remain low in the future with the increased tariffs. Even though imports from China have decreased, imports from other countries like Argentina and Czech Republic have shown increases over last year. On the downside, a decrease in imports of the lower priced products will drive the price tags up for the domestically produced pipes. Many in the pipe manufacturing business, however, seem to think the benefits outweigh the costs.