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Heavy US duty on steel pipes

By Diao Ying (China Daily)
Updated: 2008-06-24 09:42

Steel bars produced by Laiwu Steel Corporation, located in Laiwu City of Shandong Province, on June 14, 2008. The USITC has determined that the US industry is "materially injured" by imports of circular welded carbon-quality steel pipes from China.[Xinhua]

The United States International Trade Commission (USITC) has approved an earlier decision to slap a heavy anti-dumping and anti-subsidy tariff on a steel product from China.

The USITC has determined that the US industry is "materially injured" by imports of circular welded carbon-quality steel pipes from China. The US commerce department had earlier claimed these products were subsidized and sold at a price lower than fair value.

Following the commission's ruling, the US commerce department will issue countervailing and anti-dumping duty orders on imports of this product, mainly used in heating and air-conditioning systems, from China.

The highest anti-subsidy duties to be implemented are set at over 615 percent on steel pipes from Tianjin Shuangjie Pipe Group, making it one of the highest duties ever imposed on a Chinese product, according to an announcement by the US commerce department.

Chinese companies and industry analysts said the ruling was unjust and the allegation unfounded.

Qi Xiangdong, a spokesman for China Steel Association, said the heavy duties were unfair since the government stopped providing subsidies to steel enterprises a long time back.

Those opposed to the ruling say the problem lies in how imports are classified by the US. Often US companies buy from State-owned groups and the US concludes the products are subsidized just because they have a government connection.

Experts say the profit margin for this type of steel pipes is relatively low, and believe the additional tariff will substantially cut profits, forcing some firms to consider leaving the US market and seeking opportunities elsewhere.

"If the tariff is imposed, we'll quit the US market," said Lin Kai, a sales manager in charge of the US sector of Jiangsu Yulong Steel Pipe Co Ltd.

Although trade between China and the US is on the rise, the number of trade conflicts between the two has also risen. The US had initiated 129 anti-dumping investigations into Chinese products by 2007.

"There has been an increase of anti-dumping and anti-subsidy investigations on Chinese products in the US, and trade protectionism is getting fiercer," said a recent report on foreign trade by China's Ministry of Commerce.