Chinese steel imports a safety risk: U.S. lawmakers

WASHINGTON Wed Apr 30, 2008 7:15pm EDT

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WASHINGTON (Reuters) - New U.S. measures are needed to keep out shoddy Chinese steel products that threaten the safety of buildings and bridges, U.S. lawmakers and steel pipe industry representatives said on Wednesday.

"When sub-standard steel goes into our roads, bridges, and skyscrapers, it threatens our safety and unnecessarily risks American lives," Rep. Jim Visclosky, an Indiana Democrat and chairman of the Congressional Steel Caucus, said in a statement after a caucus hearing on steel imports from China.

Rep. Phil English, a Pennsylvania Republican and vice chairman of the steel caucus agreed.

"The difference between steel that makes the grade and steel that doesn't meet required standards is truly a matter of life or death," English said.

The steel caucus has no formal legislative powers but is a forum for lawmakers to work together on steel concerns.

U.S. imports of Chinese-made steel have surged in recent years to about 4.5 million tons of finished product in 2007. U.S. producers blame the sharp increase on Chinese government subsidies and unfairly low Chinese export prices.

William Upton, president of Vulcan Threaded Products, based in Pelham, Alabama, said a company team visited China in November 2006 to investigate how Chinese companies could manufacture a competing steel rod product so cheaply.

After observing "serious (safety) problems with the Chinese production," Vulcan purchased samples of the steel rod to have it tested by a certified U.S. lab, Upton said.

The results showed "133 failures out of the 222 samples tested -- an astonishing 60 percent failure rate," Upton said. "These results are unbelievable because in normal applications for this product, only a zero percent rate is acceptable."

The steel rods are used in seismic structures systems for buildings, bridges, pipelines, power plants and many other applications, Upton said.

Daniel Baldwin, assistant commissioner in the U.S. Customs and Border Protection office of international trade, told the panel his agency can reclassify an imported steel product that doesn't meet required standards, but probably does not have the authority to bar it from the United States.

Baldwin also cautioned that Customs was "probably not well equipped" to do extensive testing of that sort at ports of entry into the United States.

Steel caucus leaders said Customs should be given more authority to keep out unsafe steel imports.

Dave Phelps, president of the American Institute for International Steel, which represents importers, said any imports of unsafe or improperly marked steel were a serious concern, but he believed the lawmakers were "hysterically overstating" the degree of the problem.

"A lot of my companies have done business in China and they deal with reputable mills. There is a great deal of double-checking of products when they arrive, particularly when the products are used in critical applications," Phelps said.

That applies as much to steel made in the United States, as it does from steel from China or other suppliers, he said.

Visclosky and English also said on Wednesday they had proposed legislation require all construction projects authorized by the Departments of Defense, Homeland Security and Transportation to use only U.S. steel.

That was motivated by Homeland Security's decision to use Chinese-made steel in a section of the border fence with Mexico to discourage illegal immigration, they said.

The lawmakers' bill would violate U.S. commitments under World Trade Organization to maintain an open government procurement market, Phelps said.

(Editing by Cynthia Osterman)

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