US STEEL PUSHES OBAMA TO CHOOSE WORKERS OVER TRADE

       As presidential candidate Barack Obama pledged to stand up for workers by cracking down on imports from China.
       Now President, Obama has promised to fight protectionism and trade barriers.
       His administration must decide which path to take in two of the biggest US trade cases against China.
       US Steel and the United Steelworkers Union are behind a complaint on imported pipe. The union, an Obama political ally, is also pushing for curbs on Chinese auto tyres.
       "These are decisions that can't be avoided, so they'll be perceived as setting the tone for what the Obama administration trade policy is," said Timothy Keeler, the former chief of staff for the US Trade Representative's office. Keeler, a lawyer at Mayer Brown in Washington, represents GITI Tyre, the largest Chinese maker of tyres, in the trade case.
       The decisions may help shape the future of US-China commercial relations. The two countries trade totalled more than $400 billion (Bt13.7 trillion) last year, making China the second largest US trading partner after Canada. China is also the largest foreign holder of US debt, with $776.4 billion.
       The US International Trade Commission, an independent body, has ruled against Chinese importers in both cases. Because the complaints were brought under different provisions of trade law, the Commerce Department has the final say over tariffs on the pipe, used in oil and gas drilling, and Obama will make the call on tyres.
       In a ruling scheduled to be released today, the Commerce Department must decide whether to place duties on $2.8 billion in steelpipe imports from China to compensate for subsidies that Chinese companies collect. The case was brought by the steelworkers; US Steel, the largest US-based steelmaker; US operations of Evraz Group, Russia's second-largest steelmaker; and Wheatland Tube.
       The case is the largest so-called countervailing duty and dumping case filed against China, according to daniel Porter, a lawyer for Winston and Strawn, which represents Chinese producers in the case.
       Obama must decide by September 17 on a petition by the steelworkers to cap or put tariffs on imports of $1.7 billion of tyres from China. It is a test of whether Obama will make good on a campaign pledge to reverse course from former President George W Bush and apply the so-called safeguard measures.
       Bush turned down all four requests he received to impose duties or quotas on Chinese imports, saying the benefits of protection would be dwarfed by the costs. During the presidential campaign, Obama told the textile industry in a letter on October 24, 2008, that he would "decide those cases on their merits".
       "The one thing that is on the line here is the president's credibility," said Scott Paul, executive director of the Alliance for American Manufacturing, a coalition of steel companies such as US Steel and the Steelworkers Union.
       On April 14, 2008, presidential candidate Obama spoke to the United Steelworkers in Pittsburgh, a week before the contested Democratic primary in Pennsylvania.
       "I have consistently supported in the Senate going after China," Obama said then, after embracing union president leo Gerard. "Here's the thing that people don't understand: China needs our market. Their economy is dependent on exports to the United States. We have bargaining power."
       Obama, referring to China's purchase of US Treasuries, added this caveat: "It's pretty hard to argue with your banker," he said. "That's part of our problem with China."