US imposes duty on Chinese copper pipe, tube imports

By Lan Lan (China Daily)
Updated: 2010-10-28 10:38
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BEIJING - The United States International Trade Commission on Tuesday gave final approval to duties on seamless refined copper pipe and tube imported from China, which would damage the interests of both sides, analysts said.

The levy will also apply to products from Mexico, and that will affect China too, as the nation also has Mexican enterprises that manufacture those products.

Furthermore, the move will only result in orders being transferred to other countries with costs equal to those in China, instead of bringing substantial economic gain to the US, analysts and industry insiders said.

According to the US Commerce Department, the duties will be as much as 60.85 percent on Chinese-made copper pipes and tubes and 31.43 percent on those from Mexico.

In 2009, US imports of Chinese-made copper pipe and tube totaled $233 million, and $130 million from Mexico. These products are widely used in home appliances such as air conditioners.

"We have no choice but to stop exports to the US since we can only lose money with these new costs," said Zhao Chongwei, an overseas business manager of Chinalco Luoyang Copper Co, adding that the average net profit of domestic manufacturers is below 6 percent.

"At the same time, it can only hurt US air-conditioning manufacturers as they cannot purchase the copper tube and pipes at our prices," Zhao said.

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The duties will definitely affect his company's business in Mexico, said Zhang Yutian, a manager of the Golden Dragon Precise Copper Tube Group Inc, China's leading precise copper-tube supplier and exporter.

Golden Dragon opened a plant in Mexico in 2007 to facilitate its overseas business.

However, Zhang said his company is not worried about the duties thanks to robust demand from domestic manufacturers. "Orders from domestic manufacturers such as Midea Group are growing very fast," he said.

Zhang Yansheng, an international trade researcher at the National Development and Reform Commission, said the duties levied on Chinese products will simply damage both sides.

However, he added that given shrinking US domestic consumption and the country's rising numbers of jobless people, it is reasonable that the administration hopes to increase exports and regain the markets lost to developing countries like China.

Zhang said the recent tension between the world's two largest economies will not escalate into a "trade war" or "currency war" as that will not benefit either side.

US producers, including Cerro Flow Products Inc and Mueller Copper Tube Products Inc, filed a petition last year asking for protection against imports from China and Mexico.

Preliminary duties covering imports from both China and Mexico have been in force since May.