S&PGlobalPlatts:US line pipe producers call for Section 232 tariffs to remain on Canada, Mexico

Pittsburgh — US line pipe producers are urging the US to keep in place the Section 232 tariffs on exports of large-diameter line pipe from Canada and Mexico, even if an updated trade agreement between the three countries is ratified.

The American Line Pipe Producers Association alleges that Canada and Mexico “continue to engage in unfair trade practices” with respect to US imports of large-diameter welded line pipe (LDWP), according to a statement from the group issued Tuesday.

“The United Steelworkers recently called for the removal of Section 232 tariffs and quotas on Canada ahead of the US-Mexico-Canada Agreement’s ratification. However, while ALPPA supports the USMCA, it strongly rejects that USMCA should be tied to removal of Section 232 tariffs, particularly given the trade-distortive practices of Canada and Mexico,” the group said.

The ALPPA noted the Department of Commerce issued a final determination of dumping in a trade case involving LDWP imports from Canada last month, issuing a final weighted-average dumping margin of 12.32% for Canadian producers and exporters. The International Trade Commission is scheduled to announce its final injury determination in the case April 5.

“Even with Section 232 tariffs and dumping duties in place, Canadian LDWP producers have continued to ship massive volumes of LDWP into the US market,” the ALPPA said. “US imports of Canadian LDWP increased by more than 25% in the past year alone. This increase has directly and adversely impacted domestic LDWP producers and their workers, including USW workers working at ALPPA members Dura-Bond and Stupp Corp.”

In the case of Mexico, the group argued the Section 232 tariffs should not be dropped because Mexico’s domestic market is closed to US producers of LDWP as the country requires the use of domestic material in oil and gas pipeline projects.

If the tariffs are removed for Canada and Mexico, they should be replaced by a quota, the ALPPA said, adding that such a quota should be “well below the 2016 to 2018 average volumes for US imports from Canada, [as] any quota set at historic levels would improperly reward Canada for its surge of LDWP imports at dumped prices.”

The US remains at a standstill with Canada and Mexico in regards to the steel tariffs despite reaching a broader trade agreement in late 2018. The tariffs have become a sticking point in getting the final USMCA ratified by legislators in all three countries.

After meeting with US Trade Representative Robert Lighthizer Monday, Canada’s foreign affairs minister Chrystia Freeland signaled Canada was willing to wait for the tariffs to end before ratifying the revised trade deal.

“The existence of these tariffs for many Canadians raises some serious questions about [USMCA] ratification,” Freeland told reporters Monday. “In order to move ahead with that deal, I think Canadians feel the right thing is, there should be no 232 tariffs or retaliatory tariffs between our two countries. That was what I expressed clearly to Ambassador Lighthizer.”