China's steel makers say a US decision that could lead to a heavy duty on steel products from China is unfounded, leading some to threaten to quit the US market if plans go ahead.

The US Department of Commerce said on May 30 that several Chinese steel pipe makers are receiving subsidies from the Chinese government, which puts them at an unfair position in competition with US counterparts. The department also said that some steel producers are dumping products at a price which is lower than its cost. And as a result, it has decided to impose anti-dumping and anti-subsidy duties on circular welded steep pipe from China.

Anti-subsidy duties which could be implemented are set at over 615 percent on steel pipes from Tianjin Shuangjie Pipe Group, making it one of the highest duties ever imposed on Chinese products, according to an announcement made by the US commerce department.

But Chinese companies and industry analysts claim that the outcome is unjust and say that US evidence unfounded.

Qi Xiangdong, a spokesman from China Steel Association, called it simply unfair, since the government do not provide subsidies to steel enterprises.

Those opposed to the proposal say that the problem lies in how things are classified by the US. Often US companies buy from State-owned groups and because of this relationship with the government claim that the products are being subsidized.

This is not the case, claim workers at Jinzhou Group, a steel maker based in Shandong. "In many cases, the US does not treat China as a market economy," said a source who refused to be named.

Industry experts say that the profit margin for this type of steel pipe is relatively low, and believe that an extra tariff would lead to substantial reduced profit forcing some firms to seriously consider leaving the US market and finding opportunities elsewhere.

"If the tariff is imposed, we will quit the US market, we have our own concerns," said Lin Kai, a sales manager in charge of the US sector for Jiangsu Yulong Steel Pipe Co Ltd.

The final duty is still subject to International Trade Commission's decision, which will vote on whether the US industry circular welded pipe producers is damaged as a result of dumped and subsidized pipe from China.

(China Daily June 5, 2008)