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US sets preliminary penalties on China's oil pipes
(Xinhua)
Updated: 2009-11-06 17:32

WASHINGTON: The US Commerce Department on Thursday set preliminary anti-dumping duties on imports of Chinese-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 OCTG (oil country tubular goods) 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.

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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 dollars 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 OPPOSES 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 (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 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 (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 dependant on imported energy."

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