CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. US Congress Legitimizes Countervailing Duties

US Congress Legitimizes Countervailing Duties

by Mike Godfrey, Tax-News.com, Washington

09 March 2012


On a bipartisan basis, both the United States Senate and the House of Representatives have passed a bill to confirm that the Commerce Department can continue to apply countervailing duties (CVDs) to non-market economies (NMEs), such as China.

The bill passed the Senate on March 5 on a voice vote without debate, before being approved by the House of Representatives the following day by a vote of 370-39. The bill will now be sent for his signature to President Barack Obama, whose government has previously expressed its support.

The approval of the legislation was seen as critical to levelling the playing field for US businesses facing unfairly subsidized imports. CVDs are normally applied to maintain a competitive balance between the prices of domestically-produced and imported goods by offsetting any benefits of government subsidies to industries in the exporting country.

However, last December, the US Court of Appeals decided that Congress had originally determined that government payments cannot be characterized as ‘subsidies’ in an NME, and therefore that, as had originally been held in the Trade Court in October 2010, CVDs do not apply to NME countries.

It was expected that the Court of Appeal’s decision could have forced the Commerce Department to terminate the 23 existing CVD orders against products from China (plus one from Vietnam) and the six on-going investigations against Chinese and Vietnamese products, which could also result in the possible refund of already-collected duties.

The bill that has now been passed specifically overturns the Court of Appeals’ decision, and preserves the validity of the existing CVDs against NME countries. It was noted that, as World Trade Organization (WTO) rules do not preclude the application of CVD laws to NMEs, the legislation is also fully compatible with US WTO obligations.

In addition, it deals with the finding of the WTO Appellate Body in March 2011, that the imposition by the US of double remedies, that is, the offsetting of the same subsidization twice by the concurrent imposition of anti-dumping duties and countervailing duties, was inconsistent with its WTO obligations.

The bill therefore also provides for the Commerce Department to make a reduction to antidumping duties in NME cases where countervailing duties are simultaneously being imposed, if it can be demonstrated that domestic subsidies have inflated the dumping margin, and if the Commerce Department is able to reasonably estimate an adjustment.

Senate Finance Committee Chairman Max Baucus (D - Montana) and Subcommittee on International Trade Ranking Member John Thune (R – South Dakota) have both applauded the Senate’s unanimous passage of the legislation.

“By passing this bill, we’re backing American workers and businesses in the fight against China’s unfair trade practices,” Baucus said. “We need to maintain these countervailing duties and strongly enforce our trade laws to level the playing field for US businesses and workers.”

“I commend the Senate’s swift passage of our bipartisan legislation to ensure that American job creators have the ability to challenge unfair practices by our trading partners, including China and Vietnam,” added Thune. “In our competitive global market, it is increasingly important that America’s trading partners play by the rules.”

In his speech on the floor of the House of Representatives, its Ways and Means Committee Chairman Dave Camp (R – Michigan) commented that: “This legislation reaffirms that our anti-subsidy or countervailing duty laws apply to subsidies from China and other NMEs. China distorts the free market by giving enormous subsidies to its producers and exporters, and our companies and workers should not be expected to compete against the deep pockets of the Chinese government.”

“In addition,” he added, “this legislation fully complies with our WTO obligations. China agreed to be subject to countervailing duty laws when it joined the WTO in 2001, and the WTO has reaffirmed our right to apply these laws to China.”

TAGS: tax | law | anti-dumping | World Trade Organisation (WTO) | China | legislation | trade disputes | United States | import duty | trade | Vietnam

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

Applause to a BIPARTISAN CONGRESS which has FINALLY passed legislation in support of the USA and our workers! Maybe, NOW we can finally get back to work and compete internationally, with a CONGRESS willing to fight for the American worker and American companies, and not special interests like China and Vietnam!!!

Mickey Mouse on Friday, March 9, 2012

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »