In a preliminary decision issued Tuesday, the Commerce Department said the subsidies have come on the expense of U.S. producers and therefore agreed to impose countervailing duties of up 193.1 percent.

The decision arises from a complaint filed earlier this year on behalf of four U.S.-based producers: Allegheny Technologies Inc., AK Steel Corp., North American Stainless and Outokumpu Stainless USA.

"We are very pleased with the Commerce Department's affirmative preliminary determination that the government of China provides unfair subsidies to its domestic producers of stainless steel sheet and strip,” said John M. Herrmann, an attorney with law firm Kelley, Drye & Warren LLP, which is representing the American steelmakers in the case.  

“The requirement that U.S. importers begin to post estimated countervailing duties on shipments of stainless steel sheet and strip from China will help to eliminate unfair trade and restore a level playing field in the U.S. market," he said.

The producers contend that imports of stainless steel sheet and strip from China increased by 133 percent between 2013 and 2015. 

“China was the largest supplier of stainless sheet and strip to the U.S. market in 2015, accounting for almost half of all imports.  This surge in imports of stainless steel sheet and strip from China was driven by low import pricing that caused U.S. producers to lose significant sales and profits,” they said in a statement.

The Commerce Department is to make its final determination in the case this autumn.   

In another stainless trade case, the U.S. International Trade Commission has voted to retain anti-dumping duty orders on stainless wire rod from Japan, Korea and Taiwan, ruling that dumping likely would resume if the order was lifted.

The commission, however, rescinded anti-dumping orders on stainless wire rod from Spain and Italy.

The decisions follow a five-year sunset review that began in May 2015.