The U.S. Department of Commerce unveiled 14 proposals to strengthen the enforcement of U.S. trade laws. The measures would focus on illegal import practices from non-market economies by tightening U.S. rules governing antidumping (AD) and countervailing duties (CVD). “Dumping” is when a manufacturer(s) in one country exports a product to another country at a price that is below its production costs or the price charged in its home market. "Countervailing duties” are imposed when an investigation finds that a foreign country is subsidizing its exports and injuring the importing country’s domestic producers. The Commerce Department initiated 34 AD/CVD investigations in 2009 compared to 19 the previous year.
Non-market economies such as China could face higher duties as a result of some of the Commerce Department’s proposed changes. A number of practices to calculate production costs would be tightened or clarified. Individual companies from a foreign country would not be excused from AD/CVD duties if they demonstrate that they were not dumping or receiving subsidies for three consecutive years. Rather, they would still receive a zero dumping rate but remain within the country-wide order until that is removed.
Additionally, the Commerce Department would require importers to post cash deposits rather than bonds for imports that fall within the scope of an AD/CVD investigation, beginning with the issuance of a preliminary determination. For more information, contact Stuart Gosswein at email@example.com.