WASHINGTON, March 30: The United States announced in an unprecedented move on Friday to impose penalty tariffs on China to offset government subsidies, as it grapples with a massive trade deficit with the world’s most populous nation.

Commerce Secretary Carlos Gutierrez told a news conference that a “preliminary decision” had been made “to apply the US anti-subsidy law to imports from China.” This is the first time countervailing duties will be imposed on imports from a non-market economy.

It alters a 23-year-old policy of not applying the countervailing duty law to non-market economy countries.“China's economy has developed to the point that we can add another trade remedy tool, such as the countervailing duty law,” Gutierrez said. “The Bush administration will continue to vigorously enforce US trade law with respect to China,” he said.

Friday decision followed a case brought by a US firm NewPage Corp., which contended that imports of high-gloss paper from China represented unfair competition to US-made paper. The Commerce Department determined that Chinese producers and exporters of coated free sheet paper received “countervailable subsidies” of up to 20.35pc. —AFP