Official says investigation into Chinese coated paper violates WTO regulations China has protested against a US decision to launch an anti-subsidy investigation on imports of coated free sheet paper from the mainland. It is the first such US investigation against China in 15 years and experts predict it will worsen Sino-US trade tensions. 'The US decision is not in accordance with World Trade Organisation principles and violates US law,' Ministry of Commerce spokesman Chong Quan said. An anti-subsidy, or countervailing, measure is one taken against a subsidy considered to be inconsistent with WTO principles and deemed to injure the importing country's market. The US Department of Commerce this week also launched anti-dumping investigations on Chinese coated free sheet paper, a product used in textbooks, magazines and annual reports. The move could lead to duties that double the cost of the product. US figures show the country imported US$80.88 million of coated paper from China last year. The US Department of Commerce estimated the anti-dumping duty would be 99.65 per cent. The countervailing duty has not yet been calculated. The department will make a decision on preliminary countervailing duties on Chinese paper in January and a further decision on preliminary anti-dumping duties in April. 'It will worsen trade tensions between China and the US, because the countervailing case will make things uncomfortable for the Chinese government, definitely more than anti-dumping cases,' said Leora Blumberg, a lawyer with US law firm Heller Ehrman. In a countervailing investigation, the central government is required to respond along with Chinese companies to the US government, whereas in anti-dumping investigations, companies are the only direct respondents, she said. The US government, in the countervailing case, will investigate 13 central government programmes, including subsidies and tax rebates to mainland firms, and even China's currency policy, Ms Blumberg said. 'No government likes countervailing measures against it, as it puts its policies under the scrutiny of another government,' Ms Blumberg said. 'It has major implications. If there is a positive finding of just some of these Chinese government programmes, it will become easy to initiate countervailing actions against other Chinese industries that benefit from these programmes,' she said.