WASHINGTON (Reuters) - The United States will impose a steep duty on Chinese refrigerator magnets because production subsidies in that country put comparable American products at a disadvantage, the U.S. Commerce Department said on Wednesday.

The United States will begin collecting a preliminary duty of 70.41 percent on Chinese imports of raw flexible magnets like those that adorn refrigerators, the department said. It will issue its final decision on the level of Chinese government subsidies by early July.

"Subsidization of industries gives Chinese exporters an unjust advantage and forces American manufacturers to compete against a stacked deck," Commerce Assistant Secretary for Import Administration David Spooner said in a statement.

Raw flexible magnets are generally relatively thin, polymer bonded magnetic materials characterized by their flexibility and ease of machinability, which make them ideal for use as refrigerator magnets, the Commerce Department said.

They are also used in a broad range of domestic, commercial and industrial applications.

Magnum Magnetics Corp., a Marietta, Ohio, company that produces a variety of magnet products, filed the case last year, asking for countervailing duties.

The United States imported 103.2 million units of the magnets valued at $18.2 million in 2007, compared to 83.1 million units valued at $15.7 million in 2005.

 The 70.41 percent preliminary duty applies to all raw flexible magnet imports from China, but the agency only identified two companies that will be hit: China Ningbo Cixi Import Export Corp. and Polyflex Magnets Ltd.

U.S. Customs will collect cash deposits or bonds on magnet imports from China based on the preliminary duty rate.

Wed Feb 20, 2008 5:36pm EST

Source: reuters