The United States Commerce Department has set preliminary antidumping penalties on imports of drill pipe from China, a move that might escalate trade disputes between the two countries.

The department said it "preliminarily determined that Chinese producers or exporters of drill pipe have sold drill pipe in the United States at margins ranging between 0 and 429.29 percent."

As a result of this determination, Commerce will instruct US Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates.

In 2009, imports of drill pipe from China were valued at an estimated US$119.2 million, according to the department.

Commerce said that it is due to make its final determination in December. If it is in the affirmative, and the US International Trade Commission makes an affirmative final determination that imports of drill pipe from China materially injure, or threaten material injury to, the domestic industry, Commerce will issue an antidumping duty order.

It is just less than two months since the department set preliminary countervailing duties (CVD) on imports of drill pipe from China.

The moves came on the heels of the Toronto summit of the Group of 20 leading economies in June, when the US leaders explicitly pledged to fight various forms of protectionism.

Yet with their call for free trade still lingering in the air, US policy makers backtracked, throwing themselves into a scenario that could harm not only China's interests but also their own.

Among a host of trade remedy measures the US has taken against China, the Commerce Department set final antidumping duties on imports of woven electric blankets from China and the International Trade Commission slapped punitive antidumping tariffs on a Chinese-made chemical product.