U.S. panel OKs duties on China steel in record case

Labourers wearing improvised protection masks weld steel bars at a construction site in Wuhan, Hubei province November 28, 2009.

WASHINGTON (Reuters) - A U.S. trade panel gave final approval on Wednesday to duties ranging from about 10 to 16 percent on Chinese-made steel pipe in the biggest U.S. trade case to date against China.

The U.S. International Trade Commission voted 6-0 to allow the U.S. Commerce Department to negate Chinese government subsidies by imposing countervailing duties on Chinese-made tubing and casing used in oil and natural gas production.

The ITC decision makes "it almost a given" the panel will also approve anti-dumping duties on the Chinese goods when it votes on that issue in May, said Roger Schagrin, an attorney representing the United Steelworkers union and five of the U.S. companies involved in the case.

The United States imported $2.74 billion of "oil country tubular goods" from China in 2008, more than triple the previous year, as a surge in oil prices led to increased demand for the oil well tubing and casing.

Buoyed by success in the tubing case, the Steelworkers union and a number of companies are filing a new petition on Wednesday asking for anti-dumping and countervailing duties on drill pipe used to drill oil wells, Schagrin told Reuters.

"At a time when the nation is struggling with double-digit unemployment, full and strict enforcement of our laws against dumped and subsidized imports of steel and other manufactured products from China is essential," said Thomas Gibson, president of the American Iron and Steel Institute.

The ITC vote capped a year of U.S.-China trade friction.

U.S. companies and unions brought about a dozen trade cases against China in 2009, alleging government subsidies and unfair pricing practices.

President Barack Obama also angered Beijing in September by slapping a 35 percent duty on imports of about $1.85 billion of Chinese-made tires in response to what the ITC said was a market-disrupting surge.

China, in response, accused the United States of protectionism, filed a complaint against the tires decision at the World Trade Organization and began a probe into whether U.S. autos are "dumped" in China at unfairly low prices.

The United Steelworkers union, which was the driving force behind the tires case, joined with Maverick Tube Corp, United States Steel Corp and other U.S. manufacturers in asking for import duties on Chinese-made pipe.

The vote on Wednesday clears the way for the U.S. Commerce Department to impose final countervailing duties ranging from 10.36 percent to 15.78 percent on the pipe to offset Chinese government subsidies.

The Commerce Department has also announced preliminary anti-dumping duties of up to 99 percent on the pipe and is expected to announce its final decision on the size of those additional duties in early April.

That would set the stage for the ITC vote in May on whether to allow those additional duties.

(Reporting by Doug Palmer; Editing by Eric Beech)