U.S. to impose trade tariffs against China

WASHINGTON — The Bush administration, facing increasing anger over soaring trade deficits, announced Friday it would impose sanctions against Chinese paper imports, opening a new avenue for beleaguered U.S. manufacturers to seek government protection.

The action, announced by Commerce Secretary Carlos Gutierrez, reverses 23 years of U.S. trade policy by treating China, which is classified as a nonmarket economy, in the same way other U.S. trading partners are treated in disputes involving government subsidies.

The decision involved a case brought by NewPage, a Dayton, Ohio-based paper company. It contended that its coated paper, used in printing glossy catalogs and annual reports, was facing unfair competition from imports from Chinese companies receiving improper subsidies from the Chinese government.

Commerce imposed penalty tariffs ranging from 10.9 to 20.4 percent on imports of glossy paper from China. The tariffs will take effect next week on a preliminary basis and will become final after a further Commerce review is completed in June.

The action was being closely watched by many other U.S. companies, from steel to furniture, that were battered in recent years as Chinese imports flooded into the country.

U.S. companies have always been allowed to file anti-dumping cases, seeking penalty tariffs on the grounds that the Chinese products were being sold in the United States below cost.

But with Friday's action, they will also be able to seek penalty tariffs, known as countervailing duties, on the basis of improper government subsidies — everything from favorable loans from state-owned Chinese banks to direct government support.

The Chinese government criticized the administration decision.

"This action of the U.S. side goes against the consensus reached by the leaders of both countries to resolve disputes through dialogue," said Wang Zinpei, a spokesman for China's Ministry of Commerce, quoted by the Xinhua News Agency. "China strongly requires the U.S. side to reconsider the decision and make prompt changes."