Sept. 30 (Bloomberg) -- U.S. Steel Corp.,Nucor Corp. and the paper and minerals companies that lodged trade complaints against China this month may have acted because their sales prospects are getting better, not worse. The filings, made within two weeks of President Barack Obama’s decision to impose tariffs on imported Chinese tires, were less a me-too strategy than a bid to strike before U.S. growth erases the losses that are the basis for trade cases, said Walter Spak, the head of international trade at White & Case LLP in Washington. “For technical and strategic reasons this may be a window of opportunity to file,” said Spak, who has argued more than 100 unfair-trade cases. Regardless of the reason for filing them now, the cases may increase tensions between the trading superpowers and test how the Obama administration balances its twin commitments to protect American jobs and support open markets. China’s U.S. Ambassador Zhou Wenzhong warned this month that the tire decision set a “dangerous precedent,” while United Steelworkers union President Leo Gerard said Obama proved he would “stand with American workers.” Under Commerce Department rules, complaints filed by today can cite market conditions during early 2009. That’s when the economy was stalled. Complaints filed starting tomorrow must use data from the third quarter, when import prices rose and U.S. companies’ fortunes began improving. To win the so-called dumping duties the new cases seek, a company must show that the overseas competitor is selling its product at a discount in the U.S., injuring domestic producers. Four Complaints Four trade complaints have followed Obama’s decision on Sept. 11 to impose duties of 35 percent on $1.8 billion in automobile tires imported from China. On Sept. 16, Pittsburgh-based U.S. Steel and a U.S. subsidiary of France’s Vallourec SA, the world’s second-largest maker of steel tubes for oil and gas production, asked the Commerce Department for dumping and anti-subsidy duties of as much as 90 percent on certain Chinese steel-pipe imports. Imports of the pipe from China jumped 132 percent to $382 million in 2008, the companies said. On Sept. 23, a subsidiary of Charlotte, North Carolina- based Nucor filed a complaint, targeting Chinese-made fasteners such as nuts and bolts. And the next day, U.S. makers of detergents and food additives asked for tariffs of 189 percent on Chinese imports of sodium and phosphate salts. Art Books Appleton Coated LLC, a subsidiary of French investment company Sequana Capital SA, NewPage Corp. of Miamisburg, Ohio, and the U.S. unit of Johannesburg-based Sappi Ltd., asked for tariffs on imports of glossy paper from China and Indonesia used in magazines and art books. Shares of Sappi, the world’s largest maker of such paper, have dropped 20 percent this year. “Our options are twofold: Either shut down or fight back with our trade laws,” Mark Suwyn, executive chairman of privately owned NewPage, said in an interview. He said imports from China and Indonesia rose 40 percent this year, while domestic sales fell by 38 percent and NewPage shuttered two facilities. The Steelworkers union, which also represents paper workers, joined in both the steel pipe and paper complaints. The union, a political ally of Obama, filed the successful complaint on tire imports. Recovery Starts The complaints have been pressed even as the economy has started to pull out of the worst recession since the Great Depression. For U.S. Steel and Nucor, the largest and second-largest U.S.-based steelmakers, the first quarter marked a low point. U.S. steelmakers were running at less than 40 percent of capacity in January, down from more than 90 percent a year earlier, according to a research report from Goldman Sachs Group Inc. on Sept. 28. Production jumped in the past 10 weeks to 60 percent of total capacity, the report said. U.S. Steel almost tripled in New York trading since early March and Nucor gained more than 50 percent. U.S. Steel fell 75 cents, or 1.6 percent, to $45.56 yesterday in New York Stock Exchange composite trading. Nucor dropped 59 cents, or 1.2 percent, to $46.80. Lawyers for NewPage, the steelworkers and the pipe-makers said the cases were filed to get relief from violations of trade rules, not to get ahead of a recovery or to beat today’s deadline. “The facts on the ground have led companies to come to Washington to deal with these unfair trade issues,” said Gilbert Kaplan, a lawyer at King & Spalding LLP in Washington who represents NewPage and other companies filing trade complaints. China a Target China is a target because its exports to the U.S. are so large and have grown quickly. China ran up a $123 billion trade surplus with the U.S. through July, five times Japan’s $22 billion, the next largest according to U.S. Census data. Imports from China more than tripled to $338 billion last year from $102 billion in 2001, before it joined the World Trade Organization. China filed a complaint with the WTO after Obama imposed duties on Chinese tire imports. The cases filed in the past two weeks are different from the tires case, which went to Obama for a final decision. The more recent complaints contend Chinese products were being dumped at below-market prices and their manufacturers received unfair government subsidies. The cases will be decided by the U.S. International Trade Commission and the Commerce Department and so are insulated from direct political pressure, James Jochum, a lawyer at Jochum Shore & Trossevin PC in Washington and former Commerce Department official, said in an interview. Nine Cases China is the biggest target of antidumping cases worldwide, according to the WTO. In the U.S., nine of the 11 dumping cases filed this year targeted imports from that country. China is pouring subsidies into manufacturing companies and holding down the value of its currency to aid exporters, Roger Schagrin, a lawyer representing U.S. producers in the steel-pipe complaint, said in an interview. “The Chinese are trying to export their unemployment,” he said. “That makes them a natural target.” Bad times provide the evidence for the new trade complaints, and better times provide the wherewithal to pursue them, which can require hundreds of hours of legal fees and thousands of pages of technical data, said David Spooner, a former Commerce Department official who is a lawyer at Squire, Sanders & Dempsey LLP in Washington. Companies “have a little more cash to spend to bring a case now that the worst may be over,” Spooner said. To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

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