A DECISION by the United States Commerce Department to impose countervailing duties on US$2.7 billion worth of China-made pipes has caused outrage among the Chinese steel industry.

China's Ministry of Commerce has expressed strong opposition to the decision, saying it is a protectionist move that hurts Chinese companies' interests.

The US department announced its final decision to impose the duties, ranging from 10.36 to 15.78 percent, on Chinese exports of steel pipes on Tuesday.

The pipes, called oil country tubular goods, are used in oil wells.

It is the biggest US trade action against China in terms of value.

"The Chinese side expresses strong dissatisfaction and resolute opposition," commerce ministry spokesman Yao Jian said in a written statement.

"The American side should strictly abide by the G20 summit's promises and the joint statement by the leaders of the two countries not long ago to oppose protectionism and avoid abusively using trade relief measures."

US President Barack Obama pledged to ease trade tensions in his first visit to China last week.

The US department said it found Chinese pipe producers gained government aid ranging from 10.36 to 15.78 percent, which meant Chinese companies involved would have to pay duties in this range.

As a result of this final determination, the department will instruct US Customs and Border Protection to collect a cash deposit or bond based on these final rates.

The decision will be sent to the US International Trade Commission to evaluate the "perceived harm" Chinese pipe exports are having on American industry.

The commission is scheduled to deliver its final ruling on the case on January 7 next year.

China would probably seek mediation through the World Trade Organization, said Wu Xinchun, deputy secretary general of the China Iron and Steel Association.

The final countervailing duty was cut from an average 21.3-percent tariff set in September.

"No matter what the final duty is, the nature of this action is pure trade protectionism," Wu said.

"The duty, if applied, will seriously hurt Chinese exports of steel pipe next year. Even worse, it sets a bad example and may trigger other nations to follow suit."

The countervailing petition for Chinese pipes was filed in April by the United Steelworkers' Union.

The commerce department in September agreed on an average 21.3-percent countervailing duty in a preliminary decision and endorsed an anti-dumping duty of up to 99.14 percent on Chinese steel pipes earlier this month.

Zhou Shijian, a former trade official and now a research fellow at Tsinghua University, said yesterday that Chinese companies should use legal avenues to protect themselves.

"Under current dire situations, Chinese firms should not sit idly," he said. "They should be more active and appeal to US authorities, providing evidence to defend their rights."

Tariffs have been a source of tension between the US and China after the Obama administration decided to collect punitive duties on Chinese tires in September.