This trade flow provides updates on four critically important issues for U.S.-China economic relations and the Chinese economy: the U.S.-China trade dispute, China’s industrial excess capacity, the “Made in China 2025” initiative, and the Belt and Road Initiative.
The Trade Preferences Extension Act of 2015 has granted the Department of Commerce (“Commerce”) increased authority to make adjustments to a foreign producer’s reported home market sales prices or production costs as “outside the ordinary course of trade” in determining whether the producer has been dumping such exports in the United States.
In a recent ruling, United States Customs and Border Protection has determined that Chinese-origin goods that are assembled in and exported from a third country remain subject to Section 301 tariffs unless they have been “substantially transformed” in the third country.
Governments have many tools that they use to protect a nation’s security. In the United States, one can think of the traditional military action, diplomacy, export controls, sanctions, immigration controls, and border controls as among the tools that can be used to protect the homeland from various types of threats.
The World Trade Organization (WTO) is in crisis in 2018, due to Member country discord. The various agreements that make up the WTO are mostly 25 years old and reform is needed. The negotiating function at the WTO, which requires consensus on major issues by 164 Member countries for progress, has proven incapable of addressing most of the issues confronting the system.
On April 25, 2018, the Global Business Dialogue held an event at the National Press Club titled, “Searching for Reciprocity: Section 301 and the Future of U.S.-China Trade”. In a paper prepared for the event, the author reviews the serious and longstanding U.S. concerns in areas such as forced technology transfer, discriminatory licensing restrictions on U.S. companies, outbound investments in strategic industries and cyberattacks, theft of intellectual property, and the Trump Administration’s investigation under section 301 of the Trade Act of 1974, as amended, of these practices and its conclusions on the same.
In a trade flow in April of last year, I reviewed the structure and process under Section 232 of the Trade Expansion Act of 1962, as amended, based on the Commerce Department’s initiation on April 19, 2017 of an investigation into imports of steel into the U.S. and their effect on national security. See http://www.stewartlaw.com/Article/ViewArticle/1103. A second 232 investigation was initiated one week later on April 26, 2017, on imports of aluminum into the U.S.
At the beginning of the week, the President issued two Proclamations providing safeguard relief to the domestic solar cell industry and to the large residential washing machine industry. These Proclamations followed investigations by the U.S. International Trade Commission pursuant to section 201 of the Trade Act of 1974, as amended (19 U.S.C. 2251 et seq.), and subsequent interagency review of potential remedies and other issues.
The United States is conducting trade negotiations with Canada and Mexico to update and modify the North American Free Trade Agreement under trade promotion authority authorized pursuant to the Bipartisan Congressional Trade Priorities and Accountability Act of 2015.
The Section 201 safeguard provision of U.S. trade remedy law has been rarely used over the last decades. After roughly fifteen years, new matters are before the U.S. International Trade Commission. A case on Crystalline Silicon Photovoltaic Cells and Panels is up first, with a vote on injury on September 22. Global excess production capacity of these solar products has led to a collapse in global prices and the elimination of a large part of the U.S. industry In a new Trade Flow article, Managing Partner Terence Stewart discusses safeguards, this case and possible remedies that may result from an affirmative determination.
President Trump signed a Presidential Memorandum to the U.S. Trade Representative on August 14, 2017 directing the USTR to determine “whether to investigate any of China’s laws, policies, practices or actions that may be unreasonable or discriminatory and that may be harming American intellectual property rights, innovation, or technology developments.” 82 FR 39,007 (August 17, 2017).
President Trump has issued a series of Executive Orders in the trade area, some of which require studies to facilitate a consideration of issues to be addressed in U.S. trade policy in his Administration.
The U.S. steel industry has been hard pressed by dumped and subsidized imports for many decades causing the closure of many plants and the loss of thousands of good paying jobs.
During the campaign, now President-elect Trump identified a variety of actions that might be taken if he were President to address the nation’s trade deficit and hence restore manufacturing jobs at home. These include various actions (renegotiation, withdrawal) with regard to existing or negotiated but not yet implemented trade agreements, additional duties on imports from certain countries, increased pursuit of disputes with trading partners who are not fulfilling existing obligations, addressing currency manipulation, and strong enforcement of existing laws providing individual industries and their workers remedies for unfair trade practices.
Domestic producers and importers in the United States have had concerns for many years that some importers have gained an unfair advantage in the market by illegally evading U.S. antidumping and countervailing duty orders on certain imported products.
The United Steelworkers (“USW”) recently petitioned for relief under U.S. antidumping and countervailing duty laws on imports of passenger vehicle and light truck tires from China. It was the first antidumping and countervailing duty case that had been brought in a very long time by workers without co-petitioner support by one or more of the managements of the domestic producers.
During 2014, much of the business community sought, and continues to seek, enactment of Trade Promotion Authority (“TPA”) to permit the Administration to obtain the best market opening commitments from trade partners in the ongoing Trans-Pacific Partnership (“TPP”) talks with eleven trading partners (Australia, New Zealand, Brunei Darussalam, Malaysia, Vietnam, Japan, Singapore, Peru, Chile, Canada, Mexico) and with the European Union in the ongoing Transatlantic Trade and Investment Partnership talks.
In a new report released today, Stewart and Stewart and the Economic Policy Institute reveal how a growing glut of worldwide steel production is plunging the U.S. steel industry into crisis.
At the end of this month, two key events in the continuing effort to discipline subsidized export financing by the Government of China will occur. First, the U.S. will, for the first time, impose countervailing duties on imports from China to offset export credit subsidies provided by the China Export-Import Bank (“China Ex-Im”). The export credit program will account for the majority of countervailing duties imposed on imports of solar panels from China, due to the Chinese government’s refusal to share China Ex-Im data with the U.S. during its investigation. Second, also at the end of this month, the Treasury Department will report to Congress on progress in negotiations with China and other countries to limit export credit subsidies. This will be the first such report since the U.S. and China announced new negotiations on export financing earlier this year, with the goal of reaching an agreement by 2014.
As part of the President’s National Export Initiative, the Commerce Department announced its intention of strengthening U.S. Trade Laws on August 26, 2010. It identified fourteen different changes that it intended to make in its administrative practices.
As part of the President’s National Export Initiative, the Commerce Department announced its intention of strengthening U.S. Trade Laws on August 26, 2010. It identified fourteen different changes that it intended to make in its administrative practices. These are meant to improve the accuracy and efficacy of its administration of the trade laws.
The United States has lost millions of manufacturing jobs in recent years. While these job losses flow in part from the most severe recession since the Great Depression, a host of trade-related problems, both internal to the U.S. and external in terms of trade actions by our trading partners, have contributed significantly to the weakening of our manufacturing base.
On March 13, 2012, the President signed H.R. 4105, authorizing the United States to continue to impose countervailing duties on subsidies from non-market economies (“NMEs”) The law was passed by both the House of Representatives and the Senate the prior week (in the House by a vote of 390 – 37; in the Senate by unanimous consent).
The Obama Administration’s announcement that it has reached agreement with the European Union (EU) and Japan to end the use of “zeroing” in antidumping reviews, coupled with actions implementing the agreements (publication of the February 14, 2012 Commerce Department change in practice) and the work that will be undertaken on specific orders for specific companies to revise cash deposit rates based on the change, will result in the significant weakening of a major U.S. trade remedy for many domestic industries and their workers suffering from injurious international price discrimination.
The September 5th World Trade Organization Appellate Body report in US – Tyres (China), WT/DS399, affirmed the right of the United States faced with market disruption from surging imports from China to make use of a special transitional safeguard China accepted as part of its accession protocol to the WTO in 2001. For the industries and their workers who have sought relief under the U.S. law implementing this right (Section 421 of the Trade Act of 1974, as amended (19 U.S.C. § 2451)), it was a vindication of the correctness of their cause.
On August 31, 2011, Solyndra, Inc., a U.S. solar company that had received hundreds of millions in government-backed loan guarantees and employed more than a thousand American workers, announced it was entering bankruptcy and closing its doors. Solyndra was the third solar company to declare bankruptcy last month, following close on the heels of Evergreen Solar, Inc. and SpectraWatt Inc. While some news reports and commentators suggest the bankruptcies call into question the wisdom of U.S. government support for the solar industry, others rightly note that competition with more aggressively subsidized Chinese manufacturers has played a major role in the industry’s plight.
On March 11, 2011, the Appellate Body of the World Trade Organization (“WTO”) issued its decision in a challenge brought by the Government of China to several antidumping (“AD”) and countervailing duty (“CVD”) investigations conducted by the United States. The decision reversed a couple key aspects of an earlier WTO panel decision that had largely upheld the manner in which U.S. trade remedy laws had been applied to China. The United States now has several options before it in light of the Appellate Body’s ruling.
In 2009, China accounted for 79% of all Customs seizures of IPR-infringing goods in the U.S. - creating deep concerns within our companies about lost sales, depressed prices and profitability, and new competitors selling these illegal items
With extraordinarily high levels of unemployment and pressing challenges to the stability of our economy, Congress and the Obama Administration need to stay focused on these major trade challenges both at home and abroad.
On September 11, 2009, President Obama granted relief under the China-specific safeguard created in 2000 as part of China’s accession to the World Trade Organization. Though seven cases have been pursued under Section 421, and the independent, bipartisan International Trade Commission (“ITC”) recommended that import relief be imposed in five of those cases, the tires case is the first in which the President has agreed to apply a remedy.
The Commerce Department is revoking an eleven-year-old regulation that was supposed to clarify analysis in dumping cases in which manufactured products were subcontracted to another company. Commerce determined that the regulation ended up impeding its discretion and making it harder for domestic industries to get relief when goods are “sold at less than fair market value” (or “dumped”) in the U.S. market.
The U.S. Customs and Border Protection (CBP) announced on Thursday, April 2, that it was elevating the collection of antidumping (“AD”) and countervailing (“CVD”) duties to a “priority trade issue.” Antidumping duties are imposed on imports that have been sold in the U.S. at less than fair value, i.e., for less than they are sold in their country of production or at prices below cost. Countervailing duties are imposed on imports that have been subsidized by the government in their country of production.