Steel producers hit with huge US fees

By Si Tingting and Zhao Huanxin (China Daily)
Updated: 2009-11-07 09:00

Vice-Minister of Commerce Yi Xiaozhun on Friday sounded his "strong dissatisfaction" following an announcement from the United States that it will impose massive "anti-dumping" charges on steel pipes imported from China.

Beijing will make the issue of trade and investment protectionism an issue at next week's Asia-Pacific summit, he said.

"We resolutely oppose the abuse of protectionist measures," Yi said at a foreign ministry press conference on Friday organized in connection with President Hu Jintao's visit to Malaysia, Singapore and the Asia-Pacific Economic Cooperation (APEC) leaders' summit next week.

The US Commerce Department on Thursday slapped preliminary anti-dumping duties on Chinese-made steel pipes used in the oil and gas industry. It was the biggest US trade action against China to date, topping US President Barack Obama's earlier decision to put a 35 percent tariff on $1.85 billion of Chinese-made tires.

This time, the action will hit Chinese exports that were worth around $3.2 billion last year, Yi said.

The vice-minister of commerce said China will take "concrete measures" to protect the interests of Chinese enterprises and industries.

The vice-minister said protectionism was "persistently rampant" in the world at a time when the global economy is seeing signs of recovery from the economic recession.

He said China was one of the biggest victims of protectionist measures.

Yi added that Beijing will appeal to other members at the APEC summit for support in battling protectionism and for an open, fair and just international trade environment.

In the aftermath of the US decision, the commerce ministry announced it will launch an anti-dumping and anti-subsidies probe into certain types of US cars and off-road vehicles.

The Ministry of Commerce said on Friday the move followed concerns raised by domestic car producers.

The ruling in the US marks another big win for the United Steelworkers Union (USW), which lobbied in both the steel pipe case and the earlier tire case.

The USW was a major supporter of President Obama during last year's presidential campaign and the union is an important ally in his fight for healthcare reform.

The steel pipe anti-dumping case will impact more than 90 Chinese steel plants, many of them major employers, said Yi.

He complained that the US refusal to recognize China as a market economy means it applies double standards to China, instead of applying generally accepted World Trade Organization (WTO) rules.

"We hope the US will abide by the principles of free trade and non-discrimination in trade under the WTO in handling the issue (of recognizing China's market economy status), and resolve it as quickly as possible," Yi said.

The controversial US ruling comes one week before President Obama is set to make his first visit to China.

During the trip, Obama is expected to stress the need for the US and China to work together to help revive global economic growth and avoid protectionism.

"President Obama consistently labels such moves as efforts to safeguard the jobs of the country's steel workers and not as a protectionist action infringing WTO rules," said He Weiwen, a council member of the Chinese Societies for American Economy Studies. "Therefore, even high level talks between the two countries are unlikely to bring such US actions to an end."

More "protectionist actions" from the US are likely, He predicted.

"The anti-dumping ruling is unfair to Chinese producers who sold pipes in the US at a 20 percent premium to our domestic prices," said Li Liancang, an export manager at the state-owned Tianjin Pipe Group Co, in an interview with Bloomberg.

"Chinese exports to the US have almost stopped since the preliminary ruling in September," he added.

China's steel exports to the US fell by 73 percent in the first eight months of the year, the China Iron and Steel Association said last month.