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China railed against the United States' decision to slap anti-subsidy duties on Chinese-made steel pipes for the oil industry, the latest trade dispute between the two nations.
The taxes imposed range from 10-16 percent and will impact $2.7 billion worth of Chinese steel pipe exports, making it the largest trade measure the US has ever launched against China.
"The ruling is discriminative. China is strongly against it," said Yao Jian, spokesman for the Ministry of Commerce, in a statement yesterday.
Yao contends that the US incorrectly calculated the market value of the pipes, relying on information from other nations to evaluate the subsidy instead of using price figures from Chinese producers.
Beijing will likely appeal to the World Trade Organization, said Wu Xinchun, deputy secretary-general of China Iron & Steel Association.
The taxes from the US Commerce Department are down from its preliminary evaluation in September, when possible duties were as high as 30.69 percent. US officials said the plan counteracts China's improper loans and tax breaks to Chinese steel pipe companies.
And the ruling comes days after US President Barack Obama wrapped up his four-day China visit, during which he and President Hu Jintao agreed to resist protectionism.
Zhejiang Jianli Enterprise Co Ltd was slapped with the highest duty of 15.78 percent, followed by Wuxi Seamless Pipe Co (duty of 14.61 percent) and Jiangsu Changbao Steel Tube Co (duty of 11.98 percent).
Tianjin Pipe Group Co faces a levy of 10.36 percent. Other producers will have duties of 13.20 percent.
The controversial issue moves next to the US International Trade Commission, which has by Jan 7 to decide whether the exports hurt the US domestic industry.
The decision to impose anti-subsidy tariffs will hold if the commission rules that damage does exist.
"The US move is neither fair nor reasonable," said He Weiwen, a council member of China Society for American Economy Studies.
He said Chinese companies are the victims of trade protectionism. Since the US doesn't recognize China as a market economy, it chose a third country, whose costs could be higher than China, to evaluate the costs of Chinese goods.
"The US only have one thing in mind, and that is, protecting its industry," he said.
Wu agreed in a report by Bloomberg. He said that the US' decision is "pure trade protectionism".
A Chinese steel pipe producer said the US move has no basis and hurts its business.
"We did not dump goods. China's steel exports to the US and Europe have been priced three times higher than they have been domestically although the cost has been reduced by 20 percent in the past few years," said Gong Hongliang, vice-director of Shanghai Steel Pipe Industrial Association.
In April, major US steel makers represented by the US Steel Corp and the United Steelworkers Union filed the complaint to the US Commerce Department on anti-dumping and anti-subsidy duties against Chinese exports. The two bodies said they were hurt by a 358-percent surge in pipe imports from 2006 to 2008.
The anti-subsidy tariffs were only part of the punishment the US has imposed on Chinese steel pipes.
Earlier this month, the US announced its preliminary ruling on imposing anti-dumping tariffs ranging from 36.53-99.14 percent on 37 Chinese exporters of steel oil pipes. The case affects $3.2 billion worth of Chinese exports, which account for 50 percent of Chinese steel exports to the US last year.
The cases are among a rising number of trade disputes for China with not only the US but with many other nations.
Although leaders from both China and the US have vowed to combat trade protectionism, Washington this year launched 14 probes into Chinese exports.
From January to September, 19 economies launched 88 probes into Chinese products, involving more than $10 billion in exports. These included 57 cases of anti-dumping, nine of anti-subsidy, 15 of safeguarding measures and seven cases of special protection.
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