US will impose tax on Chinese paper imports

WASHINGTON - THE Bush administration, facing heavy pressure to deal with soaring trade deficits, announced yesterday that it was imposing economic sanctions against China as a way of protecting American paper producers from unfair Chinese government subsidies.

The action reverses 23 years of United States trade policy by treating China, which is classified as a non-market economy, in the same way that other US trading partners are treated in disputes involving government subsidies.

The decision was announced by Commerce Secretary Carlos Gutierrez. 'China's economy has developed to the point that we can add another trade remedy tool,' he said. 'The China of today is not the China of years ago. Just as China has evolved, so has the range of our tools to make sure Americans are treated fairly.'

The action means that China's imports of glossy paper will be subjected to tariffs ranging from 10.9 per cent up to 20.4 per cent as a penalty for subsidies that it is providing for its own companies. Those extra duties will be imposed immediately on a preliminary basis, pending further review.

The case, which was brought by NewPage Corp, was being closely watched by a number of other US industries from steel to furniture.