ChannelNewsAsia reports:

The United States announced in an unprecedented decision 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 so called non-market economies such as China.

The decision was based on a case brought by US firm NewPage Corp., which contended that Chinese high-gloss paper imports were fuelled by subsidies such as tax breaks, debt forgiveness, and low-cost loans that posed unfair competition to US-made paper.

The decision alters a 23-year-old US policy of not applying the countervailing duty law to nonmarket economy countries.

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