The government of the Russian Federation has decided to add China to the list of countries which are required to pay an eight percent special duty for imports of large diameter (LD) pipes of more than 508 mm outside diameter. The decision No. 402 dated May 8, 2009 becomes effective one month after its official publication and runs until December 21, 2009.
As SteelOrbis previously reported, in November 2006 Russia imposed an eight percent duty on imports of LD pipes for a period of three years. However, the duty did not affect imports from developing countries, including China, which come under the scope of Russia's Generalized System of Preference.
The duty affects LD pipes under the following HS Codes: 7304 11 900 2, 7304 19 900 2, 7304 11 900 9, 7304 19 900 9, 7304 31 800 0, 7304 39 990 0, 7304 59 990 0, 7305 11 000 1, 7305 11 000 2, 7305 11 000 3, 7305 11 000 8, 7305 12 000 1, 7305 12 000 9, 7305 19 000 0, 7305 31 000 0, 7305 39 000 0, 7305 90 000 0.
As China's steel pipe exports to Russia have continued to surge in recent years, the Russian Tube Industry Development Fund (FRTP) has been calling for a special duty on Chinese LD pipe imports, stating that China should no longer be regarded as a developing country.
According to some Chinese pipe producers, the eight percent import duty will not have a significant impact on their domestic industry, as Russia is a relatively small market for China. In addition, according to some Russian analysts, the duty in question is not prohibitive and will hardly create any great additional obstacles for Chinese exporters. Moreover, Chinese suppliers have been unable to compete with local suppliers in terms of price and delivery time.