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US slaps duties on $2.6b China steel pipe

(Agencies)
Updated: 2009-09-10 09:09

Workers complete welding the last pipe links at the construction site on the steppe near Kazakhstan commercial hub of Almaty July 10, 2009. The sign on the pipe reads in Russian and Chinese "The last welding connection of trunk gas pipeline".[Agencies]

WASHINGTON: The US Commerce Department said on Wednesday it had imposed preliminary duties ranging from 10.90 percent to 30.69 percent on $2.6 billion of steel pipe from China used to transport oil.

The case is one of the biggest to move through the US trade litigation system in recent years, and reflects concern in the US manufacturing sector on Chinese products.

Related readings:  US OKs final duties on China steel line pipe  China opposes EU's anti-dumping duties on steel pipe  China 'opposes' US ruling on steel pipe dumping duties  US to examine anti-subsidy duties on Chinese steel pipe imports  Steel pipe makers unite against US charges

The decision in the case brought by the United Steelworkers union, US Steel (X.N), Maverick Tube Corp, and other manufacturers comes as President Barack Obama faces a Sept. 17 deadline to decide whether to curb tire imports from China.

The steelworkers union are also behind the tires cases. They complain that a surge in imports from China played a major role in closure of several US tire factories.

Steelworkers said it was possible the United States might seek a negotiated settlement with China to end that case. But they urged Obama not to settle for a weak agreement just to avoid ratcheting up trade tensions with Beijing.

"It's very clear if we don't get a meaningful remedy on this (tires) case, we'll lose more jobs," Leo Gerard, president of the steelworkers union, told reporters.

Obama has pledged tough enforcement of US trade laws against China and other countries.

Imports of the Chinese-made pipe hit with preliminary "countervailing duties" increased 203 percent from 2006 to 2008, the Commerce Department said.

The US government will require importers of the Chinese steel pipe to post bonds or cash deposits to cover the duties, based on the Department of Commerce's estimate of the amount of subsidies Chinese producers have received.

Zhejiang Jianli Enterprise Co Ltd was slapped with the highest preliminary duty of 30.69 percent, followed by Wuxi Seamless Pipe Co with a duty of 24.92 percent and Jiangsu Changbao Steel Tube Co with a duty of 24.33 percent.

The Commerce Department set a preliminary duty of 10.90 percent on Tianjin Pipe Group Co and 21.33 percent on all other Chinese producers of the steel pipe.

A final decision on the size of the countervailing duties is due by Nov. 23. The US International Trade Commission also must give its approval in the case for the final duties to take force. That vote is slated for early January.

The Commerce Department also is investigating a second complaint brought by US producers and the steelworkers union that Chinese producers are "dumping" the pipe in the United States at unfairly low prices.

That could lead to anti-dumping duties ranging from 36.94 percent to 99.14 percent, on top of the preliminary countervailing duties announced on Wednesday.

A preliminary decision in the anti-dumping investigation is due by November 5.