Washington Post (April 10, 2010)

U.S. sets tariff of up to 99 percent on imports of Chinese oil field pipes

By Howard Schneider

The Commerce Department imposed penalties Friday of up to 99 percent on imports of oil field pipe from China, the latest in a growing list of duties slapped on Chinese products found to be unfairly priced.

Based on the value of the imports involved -- about $2.7 billion in 2008, although the figure fell to less than half that last year -- it is one of the largest-ever "dumping" decisions against Chinese goods and adds to what has been a tit-for-tat trade battle between the two countries over tires, chickens, paper and other goods.

The Commerce Department decision comes as top U.S. and Chinese officials work to smooth out those and other recent tensions between the two countries.

A group of American companies and labor organizations, including U.S. Steel and the United Steelworkers union, had filed a complaint over the issue a year ago, alleging that a collection of Chinese firms was selling "oil country tubular goods" below market value. The pipes, made of carbon or steel alloy, are used in oil and gas wells.

The Commerce Department ruled in the U.S. group's favor late last year and on Friday announced the tariff that will be set against the imports. The penalty will be 30 percent of the import price for most of the companies involved, although for some the duty will be 99 percent -- nearly doubling the cost of the goods.

The money will be held on deposit while an administrative review is conducted.

Steelworkers union president Leo W. Gerard hailed the decision, saying that companies that make oil field pipe were forced to lay off workers in recent years as Chinese imports spiked -- and might begin rehiring.

"China's government and exporters are being told we are fed up with their cheating on our fair trade laws," Gerard said in a written release. "Penalties for these transgressions are long overdue."

The market for oil field pipes was worth about $11 billion last year, with Chinese imports accounting for about 10 percent.

There are 95 special tariffs and duties imposed against Chinese companies for unfair pricing practices, and 23 investigations -- more than against any other country, according to a Commerce Department official.

Economic tensions between the United States and China have been rising in recent months. The United States imposed a 35 percent tariff on Chinese tires last fall, and there has been increasing anger among labor and business groups over policies that they say keep China's goods unfairly cheap.

China, in turn, has argued that the U.S. government is trying to appease labor unions by imposing the duties and has responded with measures including recent rules meant to encourage the purchase of locally made technology products.