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US slaps punitive penalties on Chinese oil tubular goods

(Xinhua)
Updated: 2009-12-31 15:13

The US International Trade Commission (ITC) on Wednesday slapped punitive penalties to imports of some $2.6 billion oil country tubular goods (OCTG) from China, a move might escalate trade disputes between the two countries.

The ITC "has made affirmative determination in its final phase countervailing duty (CVD) investigation" concerning the oil pipes from China, said the ITC in a statement.

The trade agency has determined that "a US industry is materially injured or threatened with material injury by reason of imports of certain oil country tubular goods from China that the US Department Commerce has determined are subsidized," according to the statement.

The US Commerce Department made a final determination last month to impose duties between 10.36 percent and 15.78 percent on the pipes, which are mostly used in the oil and gas industries.

The ITC ruling paved the way for the imposition of duties.

The Commerce Department made its preliminary determination of CVD in September. On November 4, the Commerce also set preliminary antidumping (AD) duties on such imports from China, which is the biggest US trade action against China.

Under that preliminary determination, Commerce set a 36.53 percent antidumping levy on OCTG from 37 Chinese companies, while some other Chinese companies will receive a preliminary dumping rate of 99.14 percent.

Commerce will make its final determination of antidumping duties early next year. If Commerce makes an affirmative final determination, and the ITC makes an affirmative final determination that imports of oil tubular goods from China materially injures, or threaten material injury to, the domestic industry, Commerce will issue an antidumping duty order.

The antidumping and countervailing petition case was filed in April this year.

From 2006 to 2008, imports of OCTG from China increased 203 percent by value and amounted to an estimated $2.7 billion in 2008, said the US Commerce Department.

China strongly opposed the US decision, saying that it is a protectionist move.

"China expressed strong dissatisfaction and is resolutely opposed to this," said China's Ministry of Commerce (MOC) 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 Chinese firms' interests," said Yao.

"We hope the United States can get rid of the bias and admit China's market economy status soon to tackle the double standards thoroughly and give Chinese enterprises equal and fair treatment," Yao also said last month.

The US industries also expressed strong dissatisfaction with the trade case, saying such a protectionist 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 (CITAC) 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 dependent on imported energy."

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 are 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 follows a 44 percent increase in new investigations in 2008. And China has become the main target of the rising protectionism.

In another steel dispute, the US Commerce Department said on Tuesday that it will impose antidumping tariffs of 14 percent to 145 percent on imports of $91 million steel grating from China. A final determination will be made by the department in April 2010.