China Condemns U.S. Tariffs on Steel Pipes

Imports of the pipes were valued at $2.6 billion last year.

China on Sept. 10 opposed a U.S. decision to slap tariffs on steel pipes from the mainland, as President Barack Obama mulled whether to also curb tire imports from the Asian giant.

The twin disputes are a litmus test for Obama's trade policy with Beijing, and are coming to the forefront ahead of his highly anticipated first presidential visit to China set for November.

In July, Obama laid out his vision of "cooperation, not confrontation" between Washington and Beijing, saying the relationship would "shape the 21st century" -- but the thorny trade issues could throw a spanner in the works.

The U.S. Commerce Department said on Sept. 9 it had made a preliminary decision to impose duties of as much as 31% on Chinese carbon or alloy tubular steel products used in oil and gas wells, following claims they were backed by unfair subsidies.

That announcement drew a quick and angry response from Beijing. "China is highly concerned over this matter. We strongly oppose such trade protectionist moves," a commerce ministry spokeswoman said.

From 2006 to 2008 U.S. imports of such pipes as oil country tubular goods (OCTG) -- from China increased 203% by volume. They were valued at $2.6 billion last year.

The Commerce Department launched a probe into the case after complaints from various U.S. industry groups and unions, including the United States Steel Corp., and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union.

"As a result of this preliminary determination, Commerce will instruct U.S. Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates," the department said. It will issue a "final determination" on the issue in November.

"This is the largest countervailing duty and dumping case filed against China, based on the value of trade," a lawyer representing a Chinese company involved in the case, said.

The quasi-judicial U.S. International Trade Commission has proposed tariffs of up to 55% on Chinese passenger and light truck tires based on a petition led by the United Steelworkers Union that tire imports had tripled since 2004, forcing plant shutdowns and the loss of 5,100 jobs.

The office of the US Trade Representative held a public hearing on the proposal and submitted its recommendation to Obama last week. Obama is required to make his decision by September 17, ahead of hosting Chinese President Hu Jintao at the G20 summit in the U.S. city of Pittsburgh on September 24-25. If Obama rejects the tire proposal, he will disappoint unions and some leaders in his Democratic party. But if he embraces the plan, he will anger China as the two countries try to build a new relationship.

The American Coalition for Free Trade in Tires, which represents the tire distribution and retail sectors, has said thousands of American jobs -- as many as 25,000 -- would be at risk if Obama accepts the tariff recommendation.

Copyright Agence France-Presse, 2009

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