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The US Commerce Department on Thursday set preliminary anti-dumping duties on imports of China-made oil pipes, the biggest US trade action against China.

More duties on Chinese goods

The Commerce Department said it "preliminarily determined that Chinese producers/exporters have sold oil country tubular goods (OCTG）in the United States at prices ranging from zero to 99.14 percent less than normal value."

The OCTG are widely used in oil and gas drilling.

As a result of this preliminary determination, a 36.53 percent levy will be imposed on the OCTG from 37 Chinese companies, while some other Chinese companies will receive a preliminary dumping rate of 99.14 percent.

The tariffs go into effect immediately, but since the finding is preliminary, US Customs and Border Protection officials will collect cash deposits or bonds.

If the preliminary finding is not upheld, the money will be returned.

From 2006 to 2008, imports of OCTG from China increased 203 percent by value and amounted to an estimated $2.6 billion in 2008, according to the US Commerce Department.

In September, the US Commerce Department also issued a preliminary countervailing duties ranging from 10.9 percent to 30.6 percent on oil pipe imports from China.

The department said that it will make its final determination of antidumping and countervailing duties next year.

With the Commerce Department's determination, the US International Trade Commission (ITC) will make an affirmative final determination that the imports of wire decking from China materially injure, or threaten material injury to, the domestic industry.

The Commerce Department will issue an anti-dumping duty order or a countervailing duty one based on the ITC's decision.

China strongly oppose US decision

China strongly opposed the US decision, calling it a protectionist move.

"China expressed strong dissatisfaction and is resolutely opposed to this," said China's Ministry of Commerce spokesman Yao Jian in a statement in September.

"This does not comply with WTO agreements on subsidies. The US used an incorrect method to define and calculate the subsidies, which has resulted in an artificially high subsidy rate, hurting the Chinese firms' interests," said Yao.

He noted that in the first quarter, the volume of Chinese OCTG exports to the US fell 55 percent from a year ago.

The US industries expressed strong dissatisfaction with the trade case, saying such a move would hurt US companies.

The trade restrictions would "hurt US using industries by raising their costs and making sources of supply uncertain," Eugene Patrone, executive director of the Consuming Industries Trade Action Coalition told Xinhua in September.

He noted that the tariffs would make oil and gas exploration and production be more expensive, projects be delayed, "which is against our national goal of being less dependant on imported energy."

China become main target of protectionism

The onset of the global recession appears to have set off an increase in trade disputes around the world.

Globally, new requests for protection from imports in the first half of 2009 were up 18.5 percent over the first half of 2008, according to the World Bank-sponsored Global Anti-dumping Database organized by Chad P. Bown, a Brandeis University economics professor.

That increase followed a 44 percent increase in new investigations in 2008.

And China has become the main target of the rising protectionism.

Earlier this week, the US Commerce Department imposed preliminary countervailing duties, ranging from 2.02 percent to 437.73 percent, on imports of steel wire decking from China.

On Wednesday, the United States, together with the European Union and Mexico, requested the WTO to establish a dispute settlement panel to rule on China's export restraints on raw materials.

The cases followed US President Barack Obama's recent decision to impose punitive tariffs on all car and light truck tires from China for three years, a move quickly denounced by China as a "serious act of trade protectionism."

The protectionist moves by the Obama administration will ultimately hurt the US- China trade relations, which are becoming more and more important due to the global financial crisis, economists warned.

The moves will also hurt the interests of US consumers.

"We're worried about increasing costs for people using these products," said Lewis Lebowitz, counsel to the Consuming Industries Trade Action Coalition.

"China is the number one target of these duties and anti-dumping measures and the primary reason is that China is very competitive," said Edwin Vermulst, a trade lawyer with Vermulst Verhaeghe Graafsma and Bronkers.

Source: BizChina