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China says U.S. abuses trade measures in steel case

BEIJING (Reuters) - The United States has misapplied its own rules by taking action against imports from China, including the newest duties against Chinese steel pipes used in transporting corrosive liquids and gas, China's Ministry of Commerce said on Thursday.

The United States on Wednesday imposed preliminary duties ranging from 11 to 13 percent on steel pipe from China, saying the duties would offset government subsidies. The case is another in a growing list of trade disputes, as U.S. manufacturers seek government help against competing imports.

"This is the United States abusing its own trade relief measures," Yao Jian, spokesman for China's Ministry of Commerce, told reporters.

The latest case concerns seamless carbon and alloy pipe of 16 inches or less in outside diameter used in industrial piping systems to carry water, steam, petrochemicals, chemicals, oil products, natural gas and other liquids and gases.

U.S. petitioners have also asked the Commerce Department to impose anti-dumping duties, in addition to the countervailing duties. Those duties aimed at below-market prices are often far larger than countervailing duties.

The United States imported $382 million of the pipe from China in 2008, compared with $130 million in 2007. Imports declined in 2009 along with the overall drop in world trade but surged late in the year as importers tried to beat anticipated duties.

As the United States has moved this year to impose duties on Chinese products, China has retaliated with anti-dumping investigations of its own, including on automobiles and chicken feet and wingtips, considered a delicacy in Chinese cuisine.

Still, Yao Jian ruled out retaliation on soy beans, for which China is the largest buyer from the United States. China's imports of U.S. soybeans were valued at about $7.5 billion in the current marketing season, and rumors that China would curtail buying, in defiance of its own interests, have in the past swept Chicago futures markets.

"The (soy) import is beneficial to China," said Yao. "More soy imports no matter from the United States or other countries can help ease pressure on China's own farmland and production costs while supporting the development of Chinese enterprises."

For U.S., European and Asian steel producers, already resigned to Chinese competition in low-grade steel products used in construction, Chinese mills' success in moving up the value chain represents a new threat.

The Chinese government has encouraged its mills to produce higher-quality products, in part to protect profits amid a glut of capacity in construction steel.

Many Chinese policies, including preferential loans and top-down efforts to close smaller and older mills, have contributed to the severe and growing overcapacity, which drives Chinese mills to export to stay afloat.

(Reporting by Aileen Wang and Lucy Hornby)

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