September 9, 2009 / 9:02 PM / 10 years ago

UPDATE 2-U.S. slaps duties on $2.6 bln China steel pipe

(Adds background, detail on duties)

By Doug Palmer

WASHINGTON, Sept 9 (Reuters) - The U.S. Commerce Department said on Wednesday it had imposed preliminary duties ranging from 10.90 percent to 30.69 percent on $2.6 billion of steel pipe from China used to transport oil.

The case is one of the biggest to move through the U.S. trade litigation system in recent years, and reflects concern in the U.S. manufacturing sector that Chinese industrial subsidies have cost jobs in the United States.

The decision in the case brought by the United Steelworkers union, U.S. Steel (X.N), Maverick Tube Corp, and other manufacturers comes as President Barack Obama faces a Sept. 17 deadline to decide whether to curb tire imports from China.

The steelworkers union are also behind the tires cases. They complain that a surge in imports from China played a major role in closure of several U.S. tire factories and the loss of more than 5,000 tire manufacturing jobs.

Steelworkers said it was possible the United States might seek a negotiated settlement with China to end that case. But they urged Obama not to settle for a weak agreement just to avoid ratcheting up trade tensions with Beijing.

“It’s very clear if we don’t get a meaningful remedy on this (tires) case, we’ll lose more jobs,” Leo Gerard, president of the steelworkers union, told reporters.

Obama has pledged tough enforcement of U.S. trade laws against China and other countries that violate rules.

However, many labor groups and manufacturers feel Obama broke a campaign promise earlier this year when he decided against labeling China as a currency manipulator.

Imports of the Chinese-made pipe hit with preliminary “countervailing duties” increased 203 percent from 2006 to 2008, the Commerce Department said.

The U.S. government will require importers of the Chinese steel pipe to post bonds or cash deposits to cover the duties, based on the Department of Commerce’s estimate of the amount of subsidies Chinese producers have received.

Zhejiang Jianli Enterprise Co Ltd was slapped with the highest preliminary duty of 30.69 percent, followed by Wuxi Seamless Pipe Co with a duty of 24.92 percent and Jiangsu Changbao Steel Tube Co with a duty of 24.33 percent.

The Commerce Department set a preliminary duty of 10.90 percent on Tianjin Pipe [TTEDAA.UL] Group Co and 21.33 percent on all other Chinese producers of the steel pipe.

A final decision on the size of the countervailing duties is due by Nov. 23. The U.S. International Trade Commission also must give its approval in the case for the final duties to take force. That vote is slated for early January.

The Commerce Department also is investigating a second complaint brought by U.S. producers and the steelworkers union that Chinese producers are “dumping” the pipe in the United States at unfairly low prices.

That could lead to anti-dumping duties ranging from 36.94 percent to 99.14 percent, on top of the preliminary countervailing duties announced on Wednesday.

A preliminary decision in the anti-dumping investigation is due by November 5. (Reporting by Doug Palmer; editing by Philip Barbara)

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