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Jobs saved in Lackawanna as trade dispute leads to discovery of error

WASHINGTON – A Canadian company with a factory in Lackawanna won't be hit as badly as it expected to be by President Trump's trade war with Canada, meaning its 100 local jobs are more likely secure than officials thought just days ago.

Welded Tube, which makes pipes for the oil and gas industry, expected to get hit with three separate tariffs because its products are manufactured in Lackawanna and finished in a plant in Ontario.

That expectation prompted both Senate Minority Leader Charles E. Schumer and Rep. Brian Higgins to rush to the company's defense on Thursday – an effort that led to the discovery that what the company was thought to be facing was the result of a clerical error.

“After direct outreach to the commissioner, we were able to get the bottom of the problem,” Schumer, a New York Democrat, said Friday. “Through discussions with the company and Customs and Border Protection officials, I got clarification and assurance that the tariff won’t apply in this case, which is great news for 100 workers at Welded Tube. I appreciate the responsiveness of CBP at a particularly critical moment for this company, and I am glad we were able to come to a quick resolution.”

Welded Tube will still get hit with tariffs because of the trade war. Some of the steel it uses to make pipes in Lackawanna originates in Canada, so it will be hit with a tariff when it imports that steel. And since Canada is proposing retaliatory tariffs to start July 1, the pipes Welded Tube sends to Canada will get hit with a tariff, too.

But because Welded Tube's customs broker mistakenly classified the company's products as Canadian in origin, its finished products would have been hit with a third tariff when they were sold in the U.S., Higgins' office said.

Not knowing that, Schumer called U.S. Customs Commissioner Kevin K. McAleenan on Thursday to seek help for Welded Tube. Meantime,  Higgins took to the House floor to speak on behalf of Welded Tube and spoke with U.S. Trade Representative Robert Lighthizer about the company.

All that attention led to the discovery of the error.

"We can say that the matter has been resolved and we don't need to address it any further," said Jeff S. Hanley, vice president of sales for energy tubulars at Welded Tube.

Higgins noted, though, that the problem never would have occurred in the first place if President Trump had not recently slapped a 25 percent tariff on steel imported from Canada, Mexico and the European Union, which prompted those entities to propose retaliatory tariffs.

"Canada has been a reliable ally in fighting terror and has been a good friend to the United States," Higgins said. “We need to stand with our allies and friends, not abandon them. China’s trade actions threaten our national security; Canada does not."

Schumer made the same point Thursday on the Senate floor , where he decried the Trump administration's deal to soften its punishment of ZTE, a Chinese telecommunications company that violated U.S. sanctions against doing business with Iran and North Korea.

"This is a serious mistake, and a 180 degree turn away from the president’s promise to be tough on China," Schumer said. "President Trump should be aiming his trade fire at China, but he inexplicably aims it at allies like Canada and Europe."

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