AD/CVD Changes Should Not Be in China Package, Trade Groups Argue
A dozen trade groups sent Congress a letter saying changes to antidumping duty and countervailing duty laws, colloquially known as Leveling the Playing Field 2.0, shouldn't be part of the compromise between the respective House and Senate China packages. Though the legislation originated in the Senate, it was inserted into the House trade title of the America Competes Act.
"This legislation would make far-reaching changes to U.S. antidumping and countervailing duty laws without being subject to the thorough Congressional deliberation required for such modifications. Proponents of this legislation contend it aims to address Chinese market-distorting activities and overcapacity in the steel sector. However, it would result in the application of more and higher tariffs on a diverse array of imported goods from all U.S. trading partners, not just China -- including products from economies that are not unfairly subsidized or dumping into the U.S. market. This would penalize legitimate trade and contribute to the inflationary pressures on American businesses," the groups wrote March 22.
The AD/CVD changes include allowing the Commerce Department to consider government subsidies to a country's companies with factories abroad. It also would allow subsidies from one country to be considered in an AD case in another country, if the company in the second country incorporated dumped or subsidized inputs. The House Rules Committee's summary said: "For example, DOC may determine whether there is a 'particular market situation' if a Turkish pipe and tube sector is using subsidized Chinese steel slab to manufacture pipe and tube products that are dumped in the U.S. market."
It would also create a "successive investigation" framework, aimed at stopping hopscotching low-cost imports after an AD/CVD case stops imports from one country. It also would be easier to prove than those sorts of cases are now, because any recovery of profitability or sales after levying duties would be disregarded; the volume of imports from the second country would not have to result in a global increase in imports, as long as the flow from the second country was expected to be as large as the flow used to be from the first country. Also, Commerce would consider whether the remedy provided for in the first case would be undermined by the imports being challenged in the second case.
These rules could apply to a case going on at the same time, or any time within two years of the first case. It also would change how duty evasion and circumvention are handled, including creating timelines for decisions. "The section also clarifies that DOC shall apply a circumvention determination on a country-wide basis, unless it is more appropriate to apply the determination to particular producers or exporters," the House summary said.
The groups argue that by shortening timelines in successive investigations, it would make it difficult for importers to adequately demonstrate that unfair subsidization isn't occurring, or is at a lower level than alleged, and said it would make it harder for agencies to do their jobs properly.
"This legislation would add to this financial burden and obstruct the global competitiveness of a broad range of businesses in the United States by prejudicing due process in AD/CVD claims against U.S. importers and ensnaring legitimate trade. It would add to inflationary pressures by raising prices of a wide variety of legitimate imports from industrial inputs to household goods," they wrote.
The U.S. Chamber of Commerce, the National Foreign Trade Council, the American Clean Power Association, the National Retail Federation, the American Apparel and Footwear Association, the Information Technology Industry Council, the Consumer Technology Association and others signed the letter.