Commerce Finds Subsidization of Pipe and Tube Imports from China
11/28/2007 - The U.S. Department of Commerce a preliminary finding that imports of rectangular pipe from China have been unfairly subsidized.
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Although Commerce always had the legal authority to apply the countervailing duty law to non-market economies, in 1984, Commerce adopted a discretionary policy of not applying the U.S. countervailing duty law to non-market economy countries.
At the time, Commerce had reasoned that subsidies had no measurable economic impact in the 1980s Soviet-style economies that were then under consideration.
Commerce first applied countervailing duty law to China, a non-market economy, in March 2007.
Anti-dumping trade rules and countervailing duty trade rules are both tools that are sanctioned by the WTO to deal with unfair pricing and subsidization of imports.
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“The Administration looked at the facts and found that China has subsidized imports of certain pipe and tube sold in the United States,” said Assistant Secretary for Import Administration David Spooner.
By law, domestic manufacturers have a right to petition Commerce and the International Trade Commission (ITC) to impose tariffs to counteract foreign subsidies. Commerce investigates the existence of subsides and the ITC separately determines whether domestic manufacturers are injured by the subsidized imports.
Today, Commerce preliminarily found that Chinese producers/exporters received countervailable subsidies ranging from 0.27% (de minimis) to 77.85%. Subsidy rates will be based on the amount of subsidies that each of the producers received from the government; these rates are intended to offset or “countervail” each of the subsidies. A final decision is currently due in April 2008.
Rectangular pipe can be used for fencing, window guards, and railing for the construction industry. It is not, however, used to convey liquid or gas. Between 2004 and 2006, imports of rectangular pipe from China increased 839.79% by volume. By 2006, these imports were valued at an estimated $44.11 million.
“The Administration is committed to aggressively enforcing U.S. trade laws to achieve a strong and fair trading relationship,” said Assistant Secretary for Import Administration David Spooner. “Commerce commonly investigates both dumping and subsidy claims and conducts all of its trade remedy proceedings on a case-by-case basis.”
