In a petition filed with the U. S. Department of Commerce on May 1, a coalition of U.S. manufacturers that produce carbon steel butt-weld pipe fittings used in pipeline applications in the oil and natural gas energy sectors, is charging that a 1992 antidumping duty order against butt-weld pipe fittings from China is being circumvented by Chinese pipe fittings that undergo minor processing in Malaysia. The coalition, whose members include Tube Forgings of America, Inc., Mills Iron Works, and Hackney-Ladish, Inc., told the Department of Commerce that companies in Malaysia are buying unfinished pipe fittings from China, performing finishing operations in Malaysia and selling the fittings to U.S. customers as products of Malaysia.
In some cases, they contend, the processing in Malaysia may be as minor as marking “Malaysia” as the country of origin. These circumvention schemes enable manufacturers in China to avoid special import duties as high as 183 percent, the coalition charged.
“The antidumping duty order against butt-weld pipe fittings from China was a lifesaver for U.S. manufacturers when it was issued in 1992,” said Tube Forgings President Jay Zidell, “It has been effective in relieving the harm to our industry from competition with unfairly priced products coming from China. Unfortunately, we have seen recently that manufacturers in China are getting around the antidumping duty order by moving their products through Malaysia. As a result of this Malaysian connection, we are again facing competition from China’s unfairly priced products.”
“Our coalition has asked the Commerce Department to put a stop to this end-around by declaring the butt-weld pipe fittings imported from Malaysia to be subject to antidumping duties as though they were exported directly from China, unless the exporters can prove that the fittings did not originate from Chinese-origin unfinished fittings,” added Tube Forgings Vice President and Chief Operating Officer Patrick Benavides.
“We believe that the evidence the coalition has submitted to Commerce makes out a clear case of circumvention,” said Jeff Carr, general manager at Hackney-Ladish. “If the Commerce Department concludes that the antidumping duty order is being circumvented, importers of carbon steel butt-weld pipe fittings from Malaysia could find themselves liable for additional import duties as high as 183 percent.”
The Commerce Department is expected to issue a preliminary determination as soon as mid-June