Special to CONTRACTOR
CHICAGO — In separate cases, U.S. producers of steel and iron pipe fittings have taken action to stem the flow of Chinese products that they contend are entering this country illegally or being sold at below-market prices.
On Dec. 4, 2002, Weldbend Corp. filed in federal district court here a lawsuit that charges three companies with the unlawful importation and sale of mismarked Chinese carbon steel butt-weld fittings and carbon steel flanges. Named in the lawsuit are: Silbo Industries of Montvale, N.J.; Pro-Fit Piping Components of Stone Mountain, Ga.; and Allied Fitting Corp. of Houston.
Also in December, Anvil International and Ward Manufacturing were waiting for the International Trade Commission to make its final duty and tariff decisions on Chinese non-malleable fittings (cast iron and ductile threaded). In the antidumping case initiated by Anvil and Ward, the ITC in September 2002 had imposed preliminary duties that range from 12.55% to 55.13%. The ITC will announce its final decision no later than the first quarter of this year.
The ITC planned to make another preliminary determination by Dec. 23 on Chinese malleable iron fittings in a second antidumping case. Anvil representatives gave testimony in November on the malleable iron antidumping petition, which U.S. manufacturers filed in late October.
The companies named by Weldbend dispute the charges in the lawsuit.
“We deny totally the validity of their claim,” said Howard Jakob, executive vice president of Silbo Industries. “I’ve been told not to say any more at this time, but it’s totally inaccurate.”
Steve McIlwaine, president of Pro-Fit, said: “As a company, we are aware of the lawsuit. We believe it to be without merit. We have retained counsel, and we have no further comment.”
In a statement issued by Allied Fitting Corp.’s attorney, the company said, “Allied believes that Weldbend’s claims are badly mistaken and false, and Allied welcomes the opportunity to contest those claims vigorously.”
It also noted: “Allied is a family-owned business located in America and owned entirely by Americans. It has earned its reputation as a responsible law-abiding corporate citizen.”
Weldbend’s complaint charges the three companies with arranging with Chinese suppliers and foreign and domestic intermediaries to transship Chinese fittings and flanges through third countries such as Taiwan, South Korea and Canada; to place false country-of-origin markings on the products; and to make false declarations as to the origin of the products, all to conceal from U.S. wholesalers, distributors and end-users the true Chinese origin of the products. The complaint alleges that the mismarkings have enabled the defendants to circumvent tariffs due on Chinese fittings and flanges.
In July 1992, the U.S. Commerce Department issued an antidumping duty order that remains in effect today and that imposed duties of up to 182% on Chinese fittings less than 14 in. in inside diameter, according to the lawsuit. In March 2002, President Bush imposed additional tariffs on steel fittings and flanges from China and elsewhere of 13% until March 2003, 10% to March 2004 and 7% to March 2005.
The mismarkings also are intended to avoid concerns that customers might have about the safety of the Chinese products, the lawsuit says.
“Defendants’ intentional introduction of falsely marked Chinese fittings and flanges into the U.S. market not only has stolen business from Weldbend and other domestic manufacturers, but also jeopardized the safety of individuals who use buildings and facilities in which such fittings and flanges are installed,” the suit states.
In court documents, Weldbend says it became aware of the scheme when Chinese manufacturers asked its representatives to participate with them in bringing mismarked products into the United States. When Weldbend asked the Chinese companies if they had experience in transshipping fittings and flanges, the Chinese allegedly identified the companies named in the suit.
Weldbend’s complaint also alleges that the defendants’ conduct has violated several U.S. laws, including the Lanham Act, the Racketeer Influenced and Corrupt Organizations Act, the common law proscription against unfair competition, and the Illinois Consumer Fraud and Deceptive Business Practices Act. Weldbend is asking the court to disgorge the profits generated by the defendants by reason of unlawful activities, to enjoin unlawful conduct, to award damages to Weldbend for the injury that it has suffered, and to require the defendants to notify customers and end-users that might have been affected by the sales of mismarked Chinese fittings and flanges.
At the same time, Anvil International said that it is pursuing antidumping actions with the Commerce Department and the International Trade Commission against Chinese manufacturers of malleable iron, cast iron and ductile iron threaded fittings.
“We believe that the fittings made in China are being sold at less than fair value in the United States resulting in significant injury to our company,” President Thomas E. Fish told employees in a memo in November. “Our actions ask the U.S. government to impose duties on Chinese fitting products in an effort to allow U.S. manufacturers like Anvil to compete on a level playing field with these competitors.”
In the earlier non-malleable fitting antidumping case, the U.S. government is collecting the preliminary duties on Chinese finished and unfinished non-malleable cast-iron pipe fittings with an inside diameter ranging from 14 in. to 6 in., whether threaded or unthreaded. These fittings include elbows, ells, tees, crosses and reducers as well as flanged fittings.