WASHINGTON — The United States decided to slap tariffs on steel pipes from China ahead of President Barack Obama's decision whether to also curb tire imports from the Asian giant.
The Commerce Department said it made a preliminary decision to impose duties as much as 31 percent on Chinese carbon or alloy tubular steel products used in oil and gas wells following claims they were backed by unfair subsidies.
"As a result of this preliminary determination, Commerce will instruct US Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates," the department said in a statement.
From 2006 to 2008, imports of such pipes -- officially known as oil country tubular goods (OCTG) -- from China increased 203 percent by volume, the statement said. They were valued at 2.6 billion dollars last year.
The department pursued an investigation into the case after complaints from various US industry groups and unions, including the United States Steel Corporation, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union.
The department will issue a "final determination" on the issue in November, the statement said.
"This is the largest countervailing duty and dumping case filed against China, based on the value of trade," a lawyer representing a Chinese company involved in the case, told AFP.
He said he was not surprised by the US decision, based on previous cases against Chinese imports.
The decision came as US President Barack Obama faces pressure to slap punitive duties on Chinese tire imports as well to save jobs at home.
The quasi-judicial US International Trade Commission has proposed tariffs of up to 55 percent on Chinese passenger and light truck tires based on a petition led by the United Steelworkers Union that the tire imports had tripled since 2004, forcing plant shutdowns and the loss of 5,100 jobs.
The office of the US Trade Representative held a public hearing on the proposal and submitted its recommendation to Obama last week.
Obama is required to make his decision by September 17, ahead of hosting Chinese President Hu Jintao at the G20 summit in the US city of Pittsburg on September 24-25.
If Obama rejects the tariff proposal, he will disappoint unions and some leaders in his Democratic Party. And if he embraces the plan, he will anger China with one of the first major trade disputes between the two powers in the Obama presidency.
Beijing could retaliate against US exports at a time when the world's largest economy is beginning to recover from a brutal recession.
In addition, the American Coalition for Free Trade in Tires, which represents the tire distribution and retail sectors, said thousands of American jobs would be at risk if Obama accepts the tariff recommendation.
It cited an expert study showing the American economy would shed 25,000 jobs, mostly in the tire distribution and retail sectors.
The United States has been grappling with a ballooning trade deficit with China amid allegations that Beijing has been manipulating its currency to make its exports more competitive.
Obama entered the White House in January after campaigning for a robust trade policy with China.
His administration has prodded China, now the third-largest buyer of US exports, to act swiftly on market reforms, saying American producers needed enhanced market access now to save and create jobs at home.
