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US considering near 100% tariff on Chinese pipes

The US launched a probe on Wednesday to consider slapping almost 100 percent tariffs on imported steel pipes from China in a move that could widen a trade spat between the two key powers.

Washington has decided to “initiate antidumping and countervailing duty investigations on imports” of Chinese “seamless” pipes used to convey water, steam, chemicals, oil products and natural gas, the Commerce Department said.

The pipes were allegedly backed by unfair subsidies.

Dumping occurs when a foreign company sells a product in a domestic market at less than normal value. Subsidies are financial assistance from foreign governments that benefit the production, manufacture or exportation of goods.

FIRST TIRES

The Commerce Department’s action came less than a month after US President Barack Obama imposed punitive duties on ­Chinese-made tires, igniting the first trade spat of his presidency.

An angry Beijing lodged a complaint at the WTO and retaliated by launching a probe into possible unfair trade practices involving imports of US car products and chicken meat.

Beijing charged that Washington’s move violated WTO rules but Obama has denied that it amounted to protectionism.

Last week, the New York Times reported that Washington had imposed tariffs on imports of solar panels, which had become “too sophisticated” to qualify for duty-free import. China is reputedly the world’s biggest solar-panel manufacturer.

The Commerce Department said the move to consider imposing tariffs on steel pipe imports stemmed from a petition from companies such as the United States Steel Corp as well as the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union.

INJURY

A “preliminary injury determination” on the steel pipe probe was expected to be made by the quasi-judicial US International Trade Commission on Nov. 2, the department said.

If imposed, duties could reach 100 percent. According to a fact sheet provided by the department, the “alleged dumping margin” is 98.37 percent.

“If the ITC determines that there is a reasonable indication that imports are materially injuring, or threatening material injury to, the domestic industry, the investigations will continue, and Commerce will be scheduled to make its preliminary CVD [countervailing duty] determination in December 2009 and its preliminary AD [antidumping] determinations in February 2010,” it said.

From 2006 to last year, imports of seamless pipes from China increased more than 131 percent by volume and were valued at an estimated US$382 million last year, the department said.

Also last month, the US made a preliminary decision to impose tariffs as much as 31 percent on another kind of steel pipe imported from China and used mostly in oil and gas wells.

It drew a quick and angry response from Beijing, which called it a “protectionist” step.
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