Economy

Drill pipe faces stiff antidumping duties in US

By Zhou Yan (China Daily)
Updated: 2011-02-09 09:40

BEIJING - While most Chinese people set off firecrackers wishing for prosperity at the start of the Year of the Rabbit, some of the nation's steel drill pipe makers may see their wishes have partly backfired.

Chinese exporters' drill pipe for oil production will face antidumping and countervailing duties as high as 430 percent after the United States International Trade Commission (ITC) agreed on Monday (Tuesday in Beijing Time) on a 3-to-3 vote that the low-priced Chinese imports may threaten harm to US producers. The duties will take effect this month.

Oil country tubular goods are loaded on a truck outside the Tianjin Pipe (Group) Corp plant in Tianjin. Chinese exporters' drill pipe for oil production will face antidumping and countervailing duties as high as 430 percent. [Photo/Agencies]

"A tie vote is enough under US trade law to win import relief, even if it is based only on a threat of injury and not actual injury that has already occurred," Reuters reported.

"The vote clears the way for the Commerce Department to issue final antidumping and countervailing duties on the imports for at least five years," it said.

Four US companies, including VAM Drilling USA and TMK IPSCO of Illinois, jointly brought the case, and the United Steelworkers Union and US Steel Corp, the country's top producer of the metal by volume, backed the complaint.

Baoshan Iron and Steel Co Ltd, the biggest listed steelmaker in China, had no dumping duty applied.

Figures from the US Department of Commerce showed that imports of drill pipes from China almost doubled from 2006 to 2008.

But the value of the imports fell to $119.2 million in 2009 from $193.8 million in 2008. The figure significantly slumped in the first half of 2010 to $24 million, after the ITC gave the final approval in December 2009 to impose countervailing duties of up to 16 percent on steel pipes made in China. It was the biggest US trade case against China by then.

"At a time when the nation is caught up with high unemployment arising from the financial crisis, trade protectionism picks up," said Bo Haibao, director of the WTO Committee of the Shanghai Lawyers Association.

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China has seen increasing antidumping and countervailing cases, mostly from the United States and the European Union, since the breakout of the financial crisis, which slowed economies and raised unemployment.

The US, for instance, issued a preliminary ruling in December to impose antidumping duties on tires from China.

China's central government has stressed several times it firmly opposes any actions that could promote trade protectionism, and it has made efforts to ease trade rifts, especially with the world's major economies.

China and the US reached an agreement on $45 billion in US export deals during President Hu Jintao's visit to Washington in January. Hu said he saw "a promising future" for bilateral trade and pledged to maintain a "transparent, just, fair, highly efficient investment climate" for foreign firms.

"China's active attitude to sign massive contracts with its major trade partners, such as the US, has showed its efforts to ease the return of global trade to the normal track and to help lay the cooperative foundation for further bilateral trade relations with other countries," said Wang Jinbi, professor at Renmin University of China.

However, such antidumping measures imposed on goods from China may continue if the major importers' economies remain fragile in the future, Bo said.