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September 11, 2009

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China blasts US steel duty plan

CHINA has criticized a preliminary US decision to impose duties of up to 31 percent on imports of Chinese-made steel pipes.

Saying it was "resolutely opposed" to the new fees, the Ministry of Commerce yesterday called on officials in the United States to reject the proposal.

The US Commerce Department announced the preliminary decision on Wednesday after determining that China was unfairly subsidizing exports of steel pipes, used for oil and gas wells.

The US action was not in line with World Trade Organization principles, and Washington is using wrong calculation methods, Commerce Ministry spokesman Yao Jian said in a statement yesterday.

"This badly hurt the interests of Chinese enterprises, and it is unacceptable to the Chinese government and Chinese industry," he said, urging the US to reject any new tariffs in its final ruling.

A sales official at Zhejiang Jianli Group, one of the Chinese companies targeted by the duties, said orders to the US have already been significantly affected because "customers are not sure what the outcome will be."

US importers of steel pipes will have to deposit duties with American Customs pending a final determination by the US Commerce Department, expected in November, and a separate decision by the US International Trade Commission.

Under the proposal, the countervailing duties on steel pipes would range from 11 percent to 31 percent on Chinese goods.

The tariffs would help US pipe producers weather a drop in demand caused by the fall in oil prices since the second half of last year. Pipe imports from China were valued at US$2.6 billion last year.

The steel pipe case comes amid a series of trade complaints against China, including a proposal to impose punitive duties on Chinese tire imports.

In the tire case, US President Barack Obama faces a deadline next Thursday to make a ruling.

Zhou Shijian, a former Chinese trade official and now a senior research fellow on China-US relations at Tsinghua University, said the two cases are different so their outcomes may not be comparable.

Zhou said that he's optimistic that Obama will refuse the proposal for punitive duties on Chinese tires.


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