U.S. launches first trade probe of 2010 against China

WASHINGTON (Reuters) - The U.S. government will investigate charges that Chinese companies are selling oil well drill pipe in the United States at unfairly low prices, the Commerce Department said on Thursday.

It is the first U.S. trade probe of the year against China after about a dozen in 2009. The proliferation of cases in recent years has strained U.S.-China trade ties.

The United Steelworkers union and a group of companies from Texas and Illinois have asked for anti-dumping duties ranging from 429 percent to 496 percent.

They also want additional countervailing duties to offset alleged government subsidies, the Commerce Department said.

The investigation covers heavyweight drill pipe and drill collars of iron or steel used to drill oil wells.

The United States imported $194.6 million of the drill pipe from China in 2008, up from $107.1 million in 2006.

Trade lawyers expect a steady stream of cases against China this year because of an expected increase in imports as the United States recovers from its worst recession in decades.

The United States already has 82 antidumping duty orders in place against a variety of Chinese goods and another 12 countervailing duty orders.

Meanwhile, several cases begun in 2009 will be working their way to conclusion in coming months.

That includes a record case involving imports of $2.74 billion of Chinese-made steel tubing and casing used in oil and natural gas production.

In the drill pipe probe, the U.S. International Trade Commission has to decide by mid-February whether there is a reasonable indication that U.S. companies have been injured or threatened with injury by the imports.

If that hurdle is cleared, the Commerce Department is expected to announce preliminary countervailing duties in March and preliminary anti-dumping duties in June.

The United Steelworkers union has been a driving force behind many of the trade cases against China, which they accuse of stealing American jobs by undercutting U.S. prices.

The other petitioners in the drill pipe case are Illinois company TMK IPSCO and Texas companies VAM Drilling USA, Rotary Drilling Tools and Texas Steel Conversions Inc.

Reporting by Doug Palmer; Editing by Cynthia Osterman