Report to Congressional Committees

United States Government Accountability Office

GAO

September 2005 U.S.-CHINA TRADE

The United States Has 

Not Restricted 

Imports under the 

China Safeguard 

GAO-05-1056 
 

www.gao.gov/cgi-bin/getrpt?GAO-05-1056.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Loren Yager at 

(202) 512-4347 or yagerl@gao.gov. 

Highlights of GAO-05-1056, a report to

congressional committees 

September 2005

U.S.-CHINA TRADE

The United States Has Not Restricted 

Imports under the China Safeguard 

The China safeguard permits WTO members, including the United States, to 

address disruptive import surges from China. In the United States, the China 

safeguard is implemented under section 421 of the Trade Act of 1974, which 

allows U.S. firms to petition for relief and establishes a three-step process. 

This process involves the International Trade Commission (ITC), Office of 

the U.S. Trade Representative (USTR), and the President and determines 

whether Chinese imports are causing market disruption to domestic 

producers and whether a remedy is in the national economic interest. The 

entire process takes about 150 days. Under the terms of China’s WTO 

accession agreement, WTO members may use the China safeguard until 2013. 

To date, the United States has not applied the China safeguard in five cases 

brought by domestic producers. In a sixth case, ITC has not yet reached a 

decision. In two cases, ITC found no market disruption. In three cases, ITC 

found market disruption and USTR evaluated the pros and cons of various 

options and made a recommendation to the President. In all three cases, the 

President declined to provide relief to the domestic industry after he found it 

would not be in the national economic interest because the costs would 

outweigh the benefits. The success rate for China safeguard petitions is 

similar to communist country safeguard petitions, but differs from that of 

global safeguard petitions. 

 

The President’s decisions not to provide import relief after ITC found market 

disruption generated controversy, including a lawsuit claiming that he 

exceeded his authority. The relevant House committee intended that the law 

create a presumption in favor of relief upon an ITC injury finding. 

Nonetheless, the U.S. Court of International Trade found the President has 

broad discretion not to apply a China safeguard. Moreover, the President 

considers the question of whether to provide relief from a broader 

perspective than ITC. The President weighs the benefits of relief against the 

costs and considers factors such as the effect on consumers and 

downstream users, which ITC does not. The President cited third-country 

imports in all his decisions denying relief under both the Chinese and 

communist country safeguards. Under the global safeguard, third-country 

imports generally cannot diminish the potential benefits of import relief to 

the domestic industry and the President has often provided relief, especially 

since 1988 when U.S. trade laws were revised. 

Outcomes of Completed China Safeguard Petitions (as of September 2005) 

Product name 

ITC vote on 

market disruption 

Presidential 

determination 

Pedestal actuators 3-2 in favor Rejected 3-year quota 

Wire hangers 5-0 in favor Rejected 3-year additional duty 

Brake drums and rotors 4-0 against N/A 

Waterworks fittings 6-0 in favor Rejected 3-year tariff rate quota 

Mattress innersprings 6-0 against N/A 

Sources: GAO, ITC, and presidential documents. 

In joining the World Trade 

Organization (WTO) in December 

2001, China agreed to a number of 

mechanisms to allow other WTO 

members to address disruptive 

import surges from that country. 

Among these was a transitional 

product-specific safeguard. In 

general, safeguards are temporary 

import restrictions of limited 

duration that provide an 

opportunity for domestic industries 

to adjust to increasing imports. U.S. 

law includes a number of other 

safeguards including a communist 

country safeguard, known as 

“section 406,” and a global 

safeguard, known as “section 201,” 

which have both applied to China. 

In light of increased concern about 

Chinese trade practices and the 

U.S. government response to them, 

the conference report on fiscal year 

2004 appropriations requested that 

GAO review the efforts of U.S. 

government agencies responsible 

for ensuring free and fair trade with 

that country. In this report, which 

is one of a series, GAO (1) 

describes the China safeguard, (2) 

describes how it has been used 

thus far, and (3) examines issues 

related to the President’s discretion 

to apply the safeguard. Other 

safeguards provide context to 

understand this mechanism. 

We provided ITC and USTR a draft 

of this report for their review and 

comment. Both agencies chose to 

provide technical comments from 

their staff. We incorporated their 

suggestions as appropriate. 
Page i GAO-05-1056 U.S.-China Trade 

Letter 1

Results in Brief 3 

Background 4 

U.S. Law Establishes Three-Step Process for China Safeguard 

Decisions 5 

The United States Has Never Applied the China Safeguard 11 

The President Has Exercised His Broad Discretion in Deciding Not 

to Apply Relief 17 

Agency Comments and Our Evaluation 23 

Appendix I Objectives, Scope, and Methodology 24 

Appendix II GAO Contact and Staff Acknowledgments 26 

Tables 

Table 1: Comparison of China, Communist Country, and Global 

Safeguards 11 

Table 2: Results of ITC China Safeguard Investigations (2002-2005) 14 

Table 3: Reasons Cited by the President in Decisions Not to 

Provide Import Relief 16 

Table 4: Outcomes of Completed China, Communist Country, and 

Global Safeguard Cases (as of September 2005) 17 

Figures 

Figure 1: China Safeguard Timeline 6 

Figure 2: Dates of China Safeguard Petitions 12

Contents 
Page ii GAO-05-1056 U.S.-China Trade 

Abbreviations 

ITC International Trade Commission 

TPSC Trade Policy Staff Committee 

USTR Office of the United States Trade Representative 

WTO World Trade Organization 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
Page 1 GAO-05-1056 U.S.-China Trade 

September 29, 2005 

The Honorable Richard C. Shelby 

Chairman 

The Honorable Barbara A. Mikulski 

Ranking Member 

Subcommittee on Commerce, Justice, and Science 

Committee on Appropriations 

United States Senate 

The Honorable Frank R. Wolf 

Chairman 

The Honorable Alan B. Mollohan 

Ranking Member 

Subcommittee on Science, State, Justice and 

 Commerce, and Related Agencies 

Committee on Appropriations 

House of Representatives 

Imports from China have grown rapidly over the last decade, from a total 

value of about $42 billion in 1995 to over $196 billion in 2004.1

 While 

lowering U.S. prices, and therefore benefiting consumers, this growth has 

presented a major challenge for U.S. producers that compete with Chinese 

products in the U.S. market. 

In joining the World Trade Organization (WTO) in December 2001, China 

agreed to a number of unique import relief mechanisms. Among them was 

a transitional product-specific safeguard (China safeguard) that allows 

other members to impose import restraints (such as quotas or tariffs) on 

China in the event of disruptive import surges.2

 

In light of increased concern about Chinese trade practices and the U.S. 

government response to them, the conference report on fiscal year 2004 

appropriations legislation3

 requested that GAO monitor the efforts of U.S. 

 1

Both values are expressed in constant 2004 dollars. 

2

WTO Protocol on the Accession of the People’s Republic of China, art. 16. 

3

H.R. Rep. No. 108-401, at 574 (2003). 

 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-1056 U.S.-China Trade 

government agencies responsible for ensuring free and fair trade with that 

country. In subsequent discussions with staff from the House 

Appropriations Committee’s Subcommittee on Science, State, Justice and 

Commerce, and Related Agencies, we agreed to provide a number of 

reports on relief mechanisms available to U.S. producers who are 

adversely affected by unfair or surging imports and the manner in which 

these mechanisms have been applied to China.4

 In this report we (1) 

describe the China safeguard, (2) describe how the safeguard has been 

used thus far, and (3) examine issues related to the President’s discretion 

to apply the safeguard. 

To describe the safeguard, we reviewed U.S. laws and procedures as well 

as relevant WTO agreements. We interviewed staff members from the 

Office of the U.S. Trade Representative (USTR), the U.S. International 

Trade Commission (ITC), WTO officials, and other experts on trade law. In 

describing how the safeguard has been used thus far, we reviewed the 

official case records for each of the five completed safeguard 

investigations conducted by ITC and USTR. To clarify the views of those 

favoring and opposing safeguard measures, we spoke with attorneys 

representing both petitioners and respondents. We also interviewed 

Chinese government officials to obtain their perspective on the China 

safeguard. To examine the application of presidential discretion, we 

reviewed and analyzed the presidential determinations, and documents 

related to the legal challenge of one of these decisions. We compared the 

China safeguard with other safeguards throughout the report in order to 

provide context for understanding the outcomes so far. We performed our 

work from January 2004 to September 2005 in accordance with generally 

accepted government auditing standards. Appendix I contains a more 

detailed description of our scope and methodology. 

 4

We have already published reports on both the China textile safeguard and the application 

of countervailing duties to China. GAO, U.S.-China Trade: Textile Safeguard Procedures 

Should Be Improved, GAO-05-296 (Washington D.C.: Apr. 4, 2005) and U.S.-China Trade: 

Commerce Faces Practical and Legal Challenges in Applying Countervailing Duties, 

GAO-05-474 (Washington D.C.: June 17, 2005). A forthcoming report will discuss

antidumping measures against China. 
Page 3 GAO-05-1056 U.S.-China Trade 

The China safeguard allows WTO members to restrict surging imports 

from China that cause market disruption to the domestic industry. In the 

United States, the safeguard is implemented by section 421 of the Trade 

Act of 1974,5

 which establishes a three-step process to consider its 

application. First, after receiving a petition, ITC determines whether there 

is market disruption by investigating whether imports from China have 

injured U.S. producers. If ITC does not find market disruption, the case 

ends. If ITC finds market disruption, it proposes a potential remedy for 

USTR’s and the President’s consideration. Second, USTR consults with 

China to seek an agreement that would address ITC’s finding of market 

disruption. Concurrently, USTR obtains and evaluates information from 

interested parties on the appropriateness of any proposed remedy and 

makes a recommendation to the President. Finally, section 421 requires 

the President to provide relief unless he determines that doing so is not in 

the national economic interest, or would cause serious harm to U.S. 

national security. The China safeguard was modeled after the communist 

country safeguard and contains similar features. A number of these 

features differ from the U.S. global safeguard, which generally must be 

applied to products from all U.S. trading partners. 

The United States has yet to apply the China safeguard, even though it has 

completed its consideration of five petitions for relief filed by U.S. 

producers. In a sixth case, ITC is expected to make a determination in 

early October 2005. In two instances, ITC found no market disruption and 

the cases ended. In the three other cases, ITC found market disruption and 

recommended a remedy to USTR and the President. In these three cases, 

USTR’s consultations with the Chinese did not result in any agreements to 

address the market disruption. USTR held public hearings and heard 

testimony on a number of remedy options, including ITC-proposed tariffs, 

quotas, and not providing any relief. USTR evaluated the pros and cons of 

the various options and made a recommendation to the President. In all 

three cases, the President declined to provide relief because he found it 

would not be in the national economic interest of the United States. 

Presidents have made similar decisions to deny relief under the 

communist country safeguard. In contrast, Presidents have granted relief 

in half of the global safeguard cases in which ITC recommended relief, and 

in all such cases after Congress revised U.S. trade law in 1988. 

 5

19 U.S.C. § 2451. 

Results in Brief 
Page 4 GAO-05-1056 U.S.-China Trade 

The President’s decisions not to provide import relief after ITC found 

market disruption generated controversy, including a legal challenge to his 

first safeguard decision before the U.S. Court of International Trade 

claiming that he exceeded his authority. The legislative history of section 

421 shows that the relevant committee intended that there would be a 

presumption in favor of the President’s providing relief once ITC found 

market disruption. While section 421 court held that the President still has 

broad discretion not to apply the China safeguard. Furthermore, the 

President considers the question of whether to provide relief from a 

broader perspective than ITC, which focuses on the domestic industry. In 

contrast, the President focuses on the national economic interest when 

weighing the benefits of relief against the costs, and considers factors such 

as the effect on consumers and downstream users, which ITC does not. 

Furthermore, the President cited third-country imports in all his decisions 

denying relief under both the Chinese and communist country safeguards. 

Conversely, under the global safeguard, third-country imports generally 

cannot diminish the potential benefits of import relief to the domestic 

industry. The President’s decisions have been different under the global 

safeguard. 

We provided ITC and USTR a draft of this report for their review and 

comment. Both agencies chose to provide technical comments from their 

staff. We incorporated their suggestions as appropriate. 

In general, safeguards are temporary import restrictions that provide an 

opportunity for domestic industries to adjust to increasing imports. Both 

the WTO Agreement on Safeguards and article XIX of the General 

Agreement on Tariffs and Trade establish general rules for the application 

of safeguard measures. Safeguard actions taken under the WTO usually 

apply to all imports of a product irrespective of source.6

 Other multilateral 

and bilateral trade agreements also contain safeguard provisions. China’s 

WTO accession agreement is an example of such an agreement. Its 

provisions contain a transitional product-specific safeguard that permits 

WTO members, including the United States, to take measures to address 

disruptive import surges from China alone. Under the terms of China’s 

WTO accession agreement, members may use the China safeguard until 

2013. 

 6

WTO Agreement on Safeguards, art. 2.2. 

Background 
Page 5 GAO-05-1056 U.S.-China Trade 

In addition to the China safeguard, three other safeguards have been 

applied to imports from that country in the United States. First, a 

communist country safeguard applied to China prior to its WTO accession 

and still applies to import surges from other communist countries that are 

not WTO members.7

 Second, Chinese imports are subject to a U.S. global 

safeguard that applies to all WTO members.8

 Third, a textile safeguard 

provided for in China’s WTO accession agreement covers textile and 

apparel imports from China.9

In the United States, the China safeguard is implemented under section 

421 of the Trade Act of 1974, as amended, which Congress enacted as part 

of the legislation authorizing the President to grant China permanent 

normal trade relations status.10 Under section 421, U.S. firms may petition 

the government to apply a China safeguard. The section establishes a 

three-step process to consider China safeguard petitions. This three-step 

process involves ITC, USTR, and the President, and it results in 

determinations about whether import surges from China have caused 

market disruption and whether a remedy is in the national economic 

interest or, in extraordinary circumstances, would cause serious harm to 

national security. The entire process takes approximately 150 days (see 

fig. 1).11 The China safeguard was modeled on the communist country 

safeguard, which applied to China before it became a WTO member. 

 7

The communist country safeguard is set forth under section 406 of the Trade Act of 1974. 

8

In the United States, the global safeguard is set forth in section 201 of the Trade Act of 

1974 and is sometimes referred to as the “escape clause” or the “section 201 safeguard.” 

9

GAO-05-296.

10Pub. L. No. 106-286, 114 Stat. 880. 

11Petitioners may claim “critical circumstances” and seek that provisional relief be provided 

within 65 days. 19 U.S.C. § 2451(i). 

U.S. Law Establishes 

Three-Step Process 

for China Safeguard 

Decisions 
Page 6 GAO-05-1056 U.S.-China Trade 

Figure 1: China Safeguard Timeline 

Note: The President, USTR, the House Committee on Ways and Means, and the Senate Committee 

on Finance may also request an investigation. Time frames vary if “critical circumstances” are 

involved. 

Event Decision

No

Yes

ITC action USTR action

Days

7

0

14

21

28

35

42

49

56

63

70

77

84

91

98

105

112

119

126

133

140

147

USTR 

consultation 

period 

with the 

Chinese

(60 days)

5 days

USTR 

deliberation 

 to 

recommend 

action 

(55 days)

ITC 

deliberation:

ITC has 

60 days to 

make market 

disruption 

(injury) 

determination

Industry group files petition

ITC determination: ITC informs both the President and USTR of its determination.

Phases Decisions/events

ITC’s report: ITC sends a report to the President and USTR that explains its 

injury determination. If affirmative, it includes a remedy recommendation and the 

economic impact of the recommended relief.

USTR’s proposal for remedy: USTR announces any proposal it has for a 

remedy and the opportunity to have a hearing on the proposed remedy, if requested. 

USTR recommends action to the President to address market disruption.

If affirmative, USTR requests consultations with the Chinese within 5 days. 

150 days

Sources: GAO analysis of information provided by USTR and ITC.

President’s 

determination

(15 days) Relief of determination: The President decides whether to provide 

import relief if he decides to do so, the relief must take effect within 15 days.

ITC writes

report

to President 

and USTR

(20 days)
Page 7 GAO-05-1056 U.S.-China Trade 

U.S. producers and certain other entities may file petitions to initiate 

China safeguard investigations with ITC. These include trade associations, 

firms, certified or recognized unions, or groups of workers that represent 

an industry. The President, USTR, the Senate Committee on Finance, and 

the House of Representatives’ Committee on Ways and Means can also 

request investigations.12

The petition must include certain information supporting a claim that 

imports from China are causing market disruption to an industry. Petitions 

must include, among other things, the following: product description, 

import data, domestic production data, and data showing injury. Petitions 

must also include information on all known producers in China and the 

type of import relief sought. 

ITC determines whether imports from China are causing market 

disruption to U.S. producers and, if so, recommends a remedy to address 

it. Upon receiving a petition, ITC initiates an investigation by publishing a 

notice in the Federal Register and holding public hearings to afford 

interested parties the opportunity to present information. ITC receives 

information on both market disruption and potential remedies from 

parties through written submission and oral testimony. ITC has 60 days to 

determine whether the imports from China are causing–or threatening to 

cause–market disruption to domestic producers. 

More specifically, ITC must determine whether imports from China are 

entering the United States in “such increased quantities or under such 

conditions as to cause or threaten to cause market disruption” to domestic 

producers. According to section 421, to determine that market disruption 

exists ITC must make the following three findings: 

• Imports of the subject product from China are increasing rapidly, either 

absolutely or relatively. 

• The domestic industry is materially injured or threatened with material 

injury. 

• Such rapidly increasing imports are a significant cause of the material 

injury or threat of material injury. 

 12Id. §§ 2451(b) and 2252(a). 

U.S. Producers May File 

Petitions Claiming Market 

Disruption Due to Chinese 

Imports 

The Role of ITC Is to 

Determine Market 

Disruption and 

Recommend a Remedy 
Page 8 GAO-05-1056 U.S.-China Trade 

If a majority of ITC commissioners determine that market disruption does 

not exist, the case ends.13 After an affirmative determination, ITC must 

propose a remedy. This could include the imposition of a duty, or an 

additional duty, or another import restriction (such as a quota) necessary 

to prevent or remedy the market disruption. 

Within 20 days after making a determination of market disruption, ITC 

must transmit a report to the President and USTR. The ITC report must 

include the determination, the reasons for it, recommendations of 

proposed remedies, and any dissenting or separate views of 

commissioners. The report must also describe the short- and long-term 

effects that recommended remedies are likely to have on the petitioning 

domestic industry, other domestic industries, and consumers. In addition, 

the report must describe the short- and long-term effects of not taking the 

recommended action on the petitioning domestic industry, its workers, the 

communities where production facilities of the industry are located, and 

on other domestic industries. 

If ITC renders an affirmative determination, USTR undertakes two parallel 

efforts. First, USTR consults with China about ITC’s finding and seeks to 

reach an agreement that would prevent or remedy the market disruption.14

If the U.S. and Chinese governments do not reach agreement after 60 days 

(or if the President determines that an agreement reached is not 

addressing the market disruption), the United States may then apply a 

safeguard. 

Concurrently, USTR obtains and evaluates information from interested 

parties on the appropriateness of ITC’s or any other proposed remedy and 

makes a recommendation to the President. Within 20 days after receiving 

the ITC report, USTR issues a Federal Register notice to solicit comments 

from the public (e.g., importers and consumers). USTR must hold a public 

hearing if requested to do so. USTR evaluates the information it receives 

and consults with the other agencies of the Trade Policy Staff Committee 

 13If the commissioners are equally divided with respect to injury, the President can 

consider either finding (negative or affirmative) as the ITC determination. 

14There is some overlap between the ITC and USTR phases of the process. The ITC has 60 

days to determine whether there is market disruption. After that it has 20 days to formulate 

a remedy to the market disruption found to exist. USTR must request consultations within 

5 days after receiving the market disruption determination. 

The Role of USTR Is to 

Make a Recommendation 

to the President 
Page 9 GAO-05-1056 U.S.-China Trade 

(TPSC).15 Within 55 days after receiving the ITC report, USTR must make a 

recommendation to the President about what action, if any, to take to 

prevent or remedy market disruption. 

Under section 421 the President makes the final decision on the provision 

of import relief. Within 15 days after receiving a USTR recommendation, 

the President must decide whether and to what extent to provide relief. 

Section 421 states: “the President shall provide import relief... unless the 

President determines that provision of such relief is not in the national 

economic interest of the United States or, in extraordinary cases, that the 

taking of action... would cause serious harm to the national security of the 

United States.” Although the law does not define “national economic 

interest,” it further states that the President may determine “that providing 

import relief is not in the national economic interest of the United States 

only if [he] finds that the taking of such action would have an adverse 

impact on the United States economy clearly greater than the benefits of 

such action.” Finally, section 421 requires the President to publish his 

decision and the reasons for it in the Federal Register.

16

The China safeguard was modeled on the communist country safeguard. In 

fact, according to its legislative history, it was intended to replace the 

communist country safeguard for China since it would no longer apply 

once China became a member of the WTO. As shown in table 1 below, the 

safeguards share several important characteristics. Both safeguards are 

limited in scope to imports from particular countries; while the former is 

limited to imports from China, the latter is limited to imports from one or 

more communist countries. They also share similar criteria with regard to 

ITC market disruption determinations and identify the President as final 

decision maker on whether to provide relief. In addition, both safeguards 

have a 150-day determination period. 

In contrast, the China safeguard is significantly different from the global 

safeguard. The China safeguard is narrower in scope than the global 

 15The TPSC is the mechanism by which USTR consults with other agencies on trade policy 

matters. 

1619 U.S.C. § 2451(l). Section 421 also authorizes the President to modify, reduce, or 

terminate the safeguard relief that he imposed. On the other hand, the President can also 

extend the effective period of the safeguard action. Id. § 2451(n) and (o). 

The Role of the President 

Is to Decide Whether 

Relief Is in the National 

Interest 

China Safeguard Modeled 

on Communist Country 

Safeguard 
Page 10 GAO-05-1056 U.S.-China Trade 

safeguard; it can only be applied to imports from that one country, 

whereas the global safeguard generally must be applied to all foreign 

sources of a particular product. Also, the China safeguard’s market 

disruption standard is regarded to be easier to meet than the criteria for 

determining injury due to imports under the global safeguard. 17

Furthermore, the standard for presidential action is also different under 

the global safeguard as it places more emphasis on assisting the domestic 

industries’ efforts to adjust to international competition (including worker 

adjustments), and sets forth a broader range of factors for the President to 

consider in determining whether to provide relief. Finally, the time frame 

for the China safeguard process is shorter than the global safeguard. 

 17See S. Rep. No. 93-1299, at 212 (1974) and 146 Cong. Rec. 18,112 (2000) (statement of Sen. 

Collins which included a September 7, 2000 letter from then-U.S. Trade Representative 

Charlene Barshefsky to Sen. Collins). 
Page 11 GAO-05-1056 U.S.-China Trade 

Table 1: Comparison of China, Communist Country, and Global Safeguards 

China safeguard (section 421) 

effective in December 2001 

Communist country safeguard 

(section 406) enacted in 1974 

Global safeguard (section 201) 

enacted in 1974a

Scope Imports from China Imports from a communist country Imports from all foreign sources 

Injury standard significant cause of material injury or 

threat thereof 

significant cause of material injury 

or threat thereof 

substantial cause of serious injury or 

threat thereof 

Presidential 

standard 

“...the President shall provide import 

relief for such industry ...unless the 

President determines that provision of 

such relief is not in the national 

economic interest of the United States 

or, in extraordinary cases, would cause 

serious harm to the national security of 

the United States.” 

“...the President must provide 

import relief, unless he determines 

that relief is not in the national 

economic interest.” 

“...the President shall take all 

appropriate and feasible action 

within his power which the President 

determines will facilitate efforts by 

the domestic industry to make a 

positive adjustment to import 

competition and provide greater 

economic and social benefits than 

costs.” 

ITC statutory 

time frame 

80 days 3 months 180 days 

USTR statutory 

time frame 

55 days N/A N/Ab

Presidential 

statutory time 

frame 

15 days 75 daysc 60 days 

Source: GAO. 

a

Congress amended the standard for presidential action for the global safeguard in the Omnibus 

Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, 102 Stat. 1225. 

b

The Trade Policy Staff Committee must advise the President; however, no specific time frame is 

outlined in the statute. 

c

The President has an additional 60 days to negotiate an orderly marketing agreement, if necessary. 

Note: Time frames vary if “critical circumstances” are involved. 

N/A=Not applicable. 

Between August 2002 and September 2005, the United States considered 

five petitions from domestic producers to apply the China safeguard but it 

has not provided relief. ITC made negative determinations on two 

petitions and, in three other cases, found market disruption and 

recommended restricting imports to remedy the situation, ITC is expected 

to make a determination in a sixth case in early October 2005. In each of 

the three cases where ITC found market disruption, USTR formulated a 

presidential recommendation after evaluating various options. The 

President then decided not to provide any import relief. The success rate 

for China safeguard petitions is similar to communist country safeguard 

petitions, but differs from that of global safeguard petitions. 

The United States Has 

Never Applied the 

China Safeguard 
Page 12 GAO-05-1056 U.S.-China Trade 

U.S. firms have filed six petitions for China safeguard relief since section 

421 was enacted (see fig. 2). The petitioners representing the domestic 

industry ranged from one firm in two cases to seven firms and a union in 

the most recent petition. The products involved are the following: 

• pedestal actuators (for raising and lowering seats in mobility scooters), 

• certain steel wire garment hangers, 

• brake drums and rotors, 

• ductile iron waterworks fittings (for municipal water systems), 

• uncovered innersprings used in mattresses, and 

• circular welded nonalloy steel pipes. 

Figure 2: Dates of China Safeguard Petitions 

ITC made negative determinations in two of five completed China 

safeguard cases.18 In cases brought by manufacturers of brake drums and 

rotors and mattress innersprings, ITC determined that Chinese imports 

 18ITC is expected to make a determination in the steel pipes case in early October 2005. 

U.S. Firms Filed Six 

Petitions 

ITC Found Market 

Disruption in Three of Five 

Cases 

Aug.

2002

pedestal 

actuators

Date cases filed:

Year

Source: GAO analysis of ITC Federal Register notices.

Nov.

2002

wire 

hangers

Jun.

2003

brake drums 

and rotors

Sept.

2003

waterworks

fittings

Jan.

2004

mattress 

innersprings

2001 2002 2003 2004 2005

Aug.

2005

steel 

pipes

Dec.

2001

safeguard 

in effect
Page 13 GAO-05-1056 U.S.-China Trade 

had not disrupted the domestic market. More specifically, in the brake 

drums and rotors case, ITC found that although imports from China were 

increasing rapidly, the domestic industry was neither materially injured 

nor threatened with material injury. In the mattress innerspring case, ITC 

was divided on the reasons for making a negative determination. Three of 

the commissioners determined that imports from China were not 

increasing rapidly. The other three commissioners determined that the 

domestic industry was not materially injured or threatened with material 

injury. In both cases, ITC cited the industries’ healthy profit margins and 

stable or rising prices as evidence that neither industry was materially 

injured or threatened with material injury. 

In the remaining three cases (pedestal actuators, wire hangers, and 

waterworks fittings), ITC found market disruption and recommended 

measures to remedy it. In all three cases, ITC cited factors such as falling 

production and employment in its determinations that the industry was 

materially injured. Furthermore, ITC noted declines in the industries’ 

health that coincided with a surge in Chinese imports when they 

determined that rapidly increasing imports from China were a significant 

cause of material injury. In other words, Chinese imports caused market 

disruption to the domestic industry. In deciding which import restriction 

to recommend, ITC considered the conditions of competition in the 

domestic industry (e.g., demand conditions, and import and domestic 

supply conditions), as well as comments received from parties in the 

cases. 

ITC recommended different import restrictions to remedy the market 

disruption it found in each case. For example, as noted in table 2 below, 

ITC found that a 3-year, declining tariff on wire hangers from China was 

the most appropriate remedy in that case. In contrast, ITC recommended a 

3-year quota in the pedestal actuator case because there was only one 

supplier and one primary purchaser of pedestal actuators, and the 

domestic-imported price differential was large. In addition, the ITC also 

proposed that the President direct the Departments of Commerce and 

Labor to provide expedited consideration of trade adjustment assistance 

applications for workers in the wire hangers and waterworks fittings 

industries. 
Page 14 GAO-05-1056 U.S.-China Trade 

Table 2: Results of ITC China Safeguard Investigations (2002-2005) 

Product name 

Number of 

firms Value of imports 

ITC market disruption 

vote ITC majority remedy recommendation 

Brake drums and rotors 3-firm coalition Brake drums: 

$13,090,000 

Brake rotors: 

$166,228,000 

(2002) 

4-0 negative N/A 

Mattress innersprings 4 $5,894,000 

(2003) 

6-0 negative N/A 

Wire hangers 3 $8,814,000 (2001) 5-0 affirmative 3-year duty in addition to the current duty 

(25% in year 1; 20% in year 2; and 15% 

in year 3). 

Waterworks fittings 1 $22,656,000 

(2002) 

6-0 affirmative 3-year tariff-rate quota, in addition to the 

current rate of duty (50% duty on imports 

above 14,324 short tons in year 1; 40% 

tariff on imports above 15,398 short tons 

in year 2; and 30% tariff on imports 

above 16,553 short tons in year 3). 

Pedestal actuators 1 Number not publicly 

available 

3-2 affirmative 3-year quantitative restriction (5,626 units 

in year 1; 6,470 units in year 2; and 

7,440 units in year 3). 

Sources: ITC staff reports and views of the commissioners. 

Note: Value of imports in last full year before investigation. 

USTR consulted with the Chinese government, solicited and obtained 

comments from a variety of sources, and analyzed the advantages and 

disadvantages of the ITC remedies and other options in formulating its 

recommendations to the President. 

After receiving each of the three affirmative market disruption 

determinations from ITC, USTR requested consultations with the Chinese 

government. USTR notified the WTO Committee on Safeguards of the 

consultation requests. Representatives of the two governments met but did 

not reach any agreements to address the market disruption found by ITC, 

according to USTR officials. During the 60-day consultation period, USTR 

continued to gather information from interested parties about any 

potential remedies. 

USTR, in conjunction with other agencies on the TPSC, held a 1-day public 

hearing for each of the cases and obtained views on what, if any, type of 

import restriction was in the public interest. The parties also had the 

opportunity to provide written comments. In addition to the ITCUSTR Consulted with 

Chinese, Sought 

Comments, and 

Considered Multiple 

Options 
Page 15 GAO-05-1056 U.S.-China Trade 

recommended remedies, USTR sought comment on alternate remedies 

and on not providing relief. The hearings included both the domestic 

petitioners and Chinese respondents, as well as other interested parties 

such as importers and downstream users. For example, the wire hanger 

hearing included testimony from a hanger distributor. In the pedestal 

actuator and wire hanger cases, a representative from the Chinese 

government testified that applying the safeguard would damage U.S.-China 

bilateral economic relations, in addition to raising procedural and 

substantive concerns.19 USTR officials said that certain information 

relevant to the effectiveness of potential remedies surfaced at these 

hearings, that did not surface in the ITC proceedings. 

After the hearings, the USTR staff weighed the pros and cons of the 

various courses of action. USTR considered ITC’s analysis, as well as the 

testimony and written submissions provided by interested parties, and 

sought comments from other TPSC members. According to detailed 

briefings from USTR officials, in each case USTR considered the ITCrecommended remedy among other remedies presented, as well as the 

option of having no remedy. USTR staff worked with the U.S. Trade 

Representative throughout the proceedings. USTR staff then drafted a 

recommendation in a memorandum to the U.S. Trade Representative, who 

assessed the various options. The Trade Representative then made a 

recommendation in a memorandum to the President. 

The President declined to provide relief in all three cases.20 He found that 

imposing remedies such as duties and quotas would not be in the national 

economic interest. The President’s reasons for not providing relief were 

printed in the Federal Register and are summarized in table 3. The 

President’s decisions did not cite national security concerns as a reason in 

any of the three cases. 

 19For example, in both cases the Chinese government argued that any remedy imposed 

would be ineffective because it would not help the petitioners and would harm U.S. 

consumers. 

20In the wire hangers case, the President directed the Secretary of Commerce and the 

Secretary of Labor to expedite consideration of any Trade Adjustment Assistance 

applications received from domestic hanger producers or their workers and to provide 

such other requested assistance or relief as they deemed appropriate, consistent with their 

statutory mandate. 

President Decided Not to 

Apply the China Safeguard 
Page 16 GAO-05-1056 U.S.-China Trade 

Table 3: Reasons Cited by the President in Decisions Not to Provide Import Relief 

Case Reasons by the President 

Pedestal actuators Imposing the ITC’s recommended quota would not benefit the domestic producing industry and would cause 

imports to shift from China to other offshore sources. 

The cost of the quota to downstream users and consumers would substantially outweigh the benefit to 

producer’s income. 

Relief would negatively impact workers in downstream industries, which have a significantly larger number 

of workers than the domestic pedestal actuator industry. 

Relief would negatively affect disabled and elderly purchasers of mobility scooters and electric wheelchairs. 

Wire hangers Imposing additional tariffs on Chinese imports would affect domestic producers unevenly. 

Domestic producers have already begun to pursue adjustment strategies. 

Domestic producers have a dominant share of the market and thus have the opportunity to adjust to 

competition from Chinese imports even without import relief. 

There is a strong possibility that if additional tariffs were imposed, production would shift to third countries. 

Additional tariffs would have an uneven impact on domestic distributors of wire hangers. 

Additional tariffs would likely have a negative effect on small dry-cleaning businesses. 

Waterworks fittings A remedy would be ineffective because imports from third countries would likely replace curtailed Chinese 

imports. 

Import relief would cost U.S. consumers substantially more than the increased income realized by domestic 

producers. 

Domestic producers enjoy a strong competitive position in the U.S. market.a

In 2002 and 2003, imports of this product have been relatively stable in volume terms and declined slightly 

in value terms.a

Source: GAO summaries of presidential determinations of January 17, 2003, April 25, 2003, and March 3, 2004. 

a

The President noted that this reason was not necessary in reaching his determination. 

The final outcomes of China safeguard cases are similar to those of 

communist country21 safeguard cases but different than global safeguard 

cases. As shown in table 4, domestic industries have sought relief under 

the China and communist country safeguards far less frequently than they 

have sought relief under the global safeguard. Overall, petitioners have 

been denied relief in almost all China and communist country safeguard 

cases but have been granted import relief in about one quarter of global 

safeguard cases. Of those cases where ITC found the industry was injured 

by imports, the President denied relief in all but one of the China and 

communist country safeguard cases. Conversely, the President granted 

 21There is no statutory list of communist countries. Petitioners have brought cases against 

the following countries: Romania, China, USSR, Poland, and East Germany. 

China and Communist 

Country Safeguard 

Outcomes Differ from 

Global Safeguard 
Page 17 GAO-05-1056 U.S.-China Trade 

relief in about half of the global safeguard cases where the ITC found 

injury. Moreover, since Congress amended the global safeguard’s standard 

for presidential action in the 1988 Trade Act, the President has always 

provided relief when ITC found injury. 

Table 4: Outcomes of Completed China, Communist Country, and Global Safeguard 

Cases (as of September 2005) 

 China safeguard

Communist country 

safeguarda Global safeguardb

Number of cases 

since enacted 5 13c

 73

ITC determination 

• Affirmative 

• Tie voted

• Negative 

• Terminated

3

0

2

0

4 

1 

7 

1 

34

6

32

1

Presidential decision 

on import relief 

• Provided 

• Not provided

0

3

1e

4g

19f

21

Source: GAO analysis of ITC import injury investigation statistics and presidential determinations. 

a

Since section 406 was modified by the Omnibus Trade and Competitiveness Act of 1988, there have 

been only two petitions. One case was terminated; in the other, the ITC made an affirmative injury 

determination and the President denied relief. 

b

Since section 201 was modified by the Trade Act of 1988, there have been 13 petitions. 

c

China has been the target of 7 out of the 13 section 406 cases brought by petitioners. 

d

In the case of a tie vote, the President may accept either an affirmative or negative determination. 

e

The President directed the U.S. Trade Representative to negotiate an orderly marketing agreement 

with China. 

f

With respect to the six tie votes referred to him under the global safeguard, the President provided 

import relief in one case. 

g

In the one section 406 case in which the ITC commissioners were evenly divided, the President took 

no action to restrict imports. 

The President’s decisions not to impose relief in the three China safeguard 

cases in which ITC found market disruption have been criticized. 

Nevertheless, the President has broad discretionary authority under 

section 421 to consider U.S. national economic and security interests 

when weighing the facts and circumstances particular to each case. This 

broad discretion was upheld by the U.S. Court of International Trade. This, 

The President Has 

Exercised His Broad 

Discretion in Deciding 

Not to Apply Relief 
Page 18 GAO-05-1056 U.S.-China Trade 

together with the fact that the President considers factors that ITC does 

not, including consumer cost and the potential for imports from other 

countries, allows him to reject relief even when it has been recommended 

by ITC. 

Several different groups have criticized the President’s decisions not to 

apply China safeguard relief. For example, company officials and trade 

lawyers who were unsuccessful in obtaining relief criticized the 

President’s decisions in several congressional hearings. As we discuss 

later, one company subsequently filed a lawsuit against the President 

claiming he exceeded his authority in rejecting ITC’s recommended 

remedy. 

In July 2005, legislation was introduced in Congress to change the 

President’s discretion.22 Some congressmen expressed disapproval over 

the President’s decisions based on the fact that ITC made unanimous, 

affirmative determinations in two of these cases. One representative in 

particular argued that the President was not following the intent of the law 

in rejecting the safeguard actions. Also, 21 other House members wrote 

the President stating their belief that Congress had carefully limited the 

President’s discretion to deny relief. In this regard, the legislative history 

of section 421 shows that the House Committee on Ways and Means 

intended a presumption in favor of relief. The House report stated: 

The bill establishes clear standards for the application of Presidential discretion in 

providing relief to injured industries and workers. If the ITC makes an affirmative 

determination on market disruption, there would be a presumption in favor of providing 

relief. That presumption can be overcome only if the President finds that providing relief 

would have an adverse impact on the United States economy clearly greater than the 

benefits of such action, or, in extraordinary cases, that such action would cause serious 

harm to the national security of the United States.23

This legislative history, together with the China safeguard’s shorter time 

frames and lesser injury standard, and other procedural characteristics, 

may have created an expectation that the likelihood for relief under the 

China safeguard was going to be greater compared with the global 

safeguard. 

 22H.R. 3306, 109 Cong., 1st Sess. (2005). 

23H.R. Rep. No. 106-632, at 18 (2000). 

Presidential Decisions Not 

to Apply Safeguards Have 

Generated Controversy 
Page 19 GAO-05-1056 U.S.-China Trade 

Similarly, the U.S.-China Economic and Security Review Commission, a 

body established by Congress to monitor and investigate the security and 

economic implications of the bilateral economic relationship between the 

United States and China, held hearings and criticized the administration 

for failing to apply the safeguard after an affirmative ITC injury 

determination. In March 2005, this commission recommended that 

Congress consider amending the China safeguard to either eliminate the 

President’s discretion or limit it to the consideration of noneconomic 

national security factors after an affirmative ITC finding. 

In addition, the lack of any positive decisions by the President in these 

cases may have discouraged other U.S. producers from seeking relief 

under the China safeguard. Several trade lawyers representing domestic 

U.S. producers with whom we spoke told us about their reluctance to 

bring additional China safeguard cases in the future because they thought 

that the President would reject them based on political considerations. 

The U.S.-China Economic Security Review Commission expressed similar 

concern that repeated presidential refusal to apply the safeguard had 

undermined the instrument’s efficacy. Indeed, until August 2005, when 

producers filed a petition on steel pipe, no China safeguard petition had 

been filed since March 2004, when the President rejected an ITC 

recommendation to provide relief from imports of Chinese ductile iron 

waterworks fittings. 

Despite criticisms, the President’s discretion under the China safeguard is 

quite broad. The President must provide relief unless he finds that it is not 

in the national economic or security interest. With regard to the former, 

the President is authorized to deny relief when he finds that the relief 

would have an adverse impact on the United States economy clearly 

greater than the benefits. 

In June 2004, the U.S. Court of International Trade affirmed the President’s 

broad discretionary authority in a case brought by the petitioner in the 

first China product safeguard case.24 In that case, Motion Systems Corp. 

contended that the President had exceeded his authority under section 421 

by not providing relief. In particular, Motion Systems argued that the 

President was required to quantify the adverse impact of providing relief 

and demonstrate that the adverse impact was clearly greater than the 

 24Motion Systems Corp. v. Bush, 342 F. Supp. 2d 1247 (C.I.T. 2004). 

Court Has Found that the 

President Has Broad 

Statutory Discretion 
Page 20 GAO-05-1056 U.S.-China Trade 

benefits that the relief would provide to the domestic industry. In this 

regard, Motion Systems maintained that section 421 created a presumption 

of relief once ITC made an affirmative determination of market 

disruption.25

In affirming the President’s decision,26 the Court held that the President 

had not exceeded his authority and said the law granted him “considerable 

discretion.”27 The Court found that section 421 made no reference to 

evidence or a burden of proof that the President must satisfy to support 

his conclusion that the imposition of a safeguard would have an adverse 

impact on the U.S. economy clearly greater than its benefits.28 The Court 

also noted that the President was not prohibited from considering political 

factors in making a finding about the adverse impact on the U.S. economy, 

including trade relations between the United States and China.29 Finally, 

the Court did not specifically comment on the presumption of relief issue. 

While ITC makes remedy recommendations that would alleviate market 

disruption, the President considers a broader range of factors than ITC in 

determining whether to apply China safeguard relief. Specifically, under 

section 421, ITC focuses on the domestic industry involved in the 

proceeding, both in the context of making injury determinations and 

recommendations for relief. For example, among the factors ITC 

considered in determining material injury were the idling of U.S. 

production facilities and the ability of firms within the industry to produce 

at reasonable profit, wage, and employment levels.30 Thus, ITC did not 

 25In making this argument Motion Systems relied, in part, on the language in the House 

Report, quoted above in the text. 

26An appeal of the decision is pending before the Court of Appeals for the Federal Circuit. 

27The Court’s analysis focused on the standard of review the Court should apply in 

reviewing presidential actions under U.S. trade statutes. 342 F.Supp. at 1258-67. 

28In this regard, the Court disagreed that the “clearly greater” language requires that the 

evidence supporting the President’s denial must be “clear and convincing,” “beyond a 

reasonable doubt,” or “more-than-substantial.” Id.1261-62. 

29Nevertheless, the Court found that neither the record before it, nor the text of the 

President’s decision, established that trade relations between the United States and China 

were a factor in the President’s decision. Id. at 1265-66. 

30The ITC commissioners have noted in their determinations that they do not consider any 

one factor dispositive. E.g., Pedestal Actuators from China, Inv. No. TA-421-1, USITC Pub. 

3557 at 13 (Nov. 2002). 

President Considers a 

Broader Range of Factors 

than ITC 
Page 21 GAO-05-1056 U.S.-China Trade 

weigh the interests of other groups such as consumers and downstream 

industries against potential benefits to the domestic industry when 

developing its recommendations for the President to consider. 31

Nevertheless, ITC reports on the potential economic effect of its 

recommended remedies, as described earlier. However, section 421, does 

not require ITC to consider these broad economic effects when developing 

its recommendations. 

In contrast, as discussed above, section 421 authorizes the President to 

consider overall U.S. economic and security interests in deciding whether 

to impose China safeguard relief.32 In each of the three cases where ITC 

found injury and recommended a remedy, the President found, among 

other things, that relief would have an adverse impact on other 

participants in the economy. The President determined that relief would 

carry substantial costs for consumers or downstream users of the 

products involved. Specifically, the President cited the increased costs to 

aged and disabled consumers of mobility scooters as a reason for not 

providing relief in the pedestal actuator case. In the wire hangers case, the 

President stated that relief would have an uneven impact on wire hanger 

distributors and impose increased costs on dry cleaning companies. 

Finally, in the waterworks fittings case, the President found that the costs 

to consumers would substantially outweigh producer income benefits. 

The President’s decisions also took into account the unique facts and 

circumstances in each case. For example, in the pedestal actuator case 

there was only one petitioner seeking relief and one dominant purchaser. 

In the wire hanger case, domestic producers had different business models 

that affected whether a remedy would benefit or disadvantage them. In 

addition, the U.S. Trade Representative noted in a March 2004 

congressional hearing that, while not necessary to the President’s 

decision, in the waterworks fittings case the petitioner faced serious 

problems besides competing Chinese imports.33 Although the President did 

 31Furthermore, ITC’s recommended remedies only address imports from China that caused 

market disruption. 

32In making its required recommendations to the President about what, if any, action to 

take to prevent or remedy market disruption, USTR informed us that it both considers a 

broader range of information about the domestic industry involved than ITC, as well as 

broader national economic factors. 

33President Bush’s Trade Agenda: Hearing Before the House Comm. on Ways and Means, 

108th Cong. 43 (2004)(statement of Robert Zoellick, United States Trade Representative). 
Page 22 GAO-05-1056 U.S.-China Trade 

not provide import relief in these cases, he stated that he remains 

committed to applying the China safeguard when circumstances warrant. 

The President has considered whether relief would benefit the producers 

involved in every case.34 In his decisions denying relief the President stated 

that imposing a safeguard would have limited benefits. One factor that the 

President has cited in all three cases is that applying a safeguard would 

lead to production being shifted from China to other countries rather than 

to U.S. producers. In the waterworks fittings case, the President 

specifically identified other current suppliers to the U.S. market such as 

India, Brazil, Korea, and Mexico. 

Similarly, in all but one communist country safeguard determinations, the 

President found, among other things, that providing relief would have 

resulted in imports shifting from the communist country involved to other 

offshore sources. With only one exception, the President has never 

approved a remedy under the communist country safeguard. In contrast, 

under the global safeguard, imports from other countries generally cannot 

diminish the potential benefits of import relief.35 Since the global safeguard 

statute was enacted in 1974, the President applied relief in approximately 

half of the cases in which ITC has made a positive injury determination. 

Moreover, since it was substantially amended in 1988, the President has 

provided relief in every such global safeguard case. It is not possible to 

identify all the factors that contribute to such opposite results among the 

different safeguards. However, one consistent factor has been that the 

China and communist country safeguards, respectively, are limited in 

scope to products from one or a few countries; this allows other foreign 

sources to gain market share of the product and reduce the potential 

benefit of the safeguard to the domestic producers. 

 34A USTR official testified in April 2005 that the extent to which relief would benefit the 

domestic producers was “first and foremost” among the economic factors that the 

administration examines in deciding whether to impose relief. 

35In global safeguards, the United States excludes developing country imports that fall 

below a threshold level, and under varying circumstances may also exclude imports from 

countries with which it has entered into a free trade agreement, such as Canada and 

Mexico. 

President Cites Third 

Country Imports When 

Denying Relief 
Page 23 GAO-05-1056 U.S.-China Trade 

We provided ITC and USTR a draft of this report for their review and 

comment. Both agencies chose to provide technical comments from their 

staff. USTR staff cautioned against drawing overall conclusions about the 

use of the China safeguard given the small number of cases considered 

thus far. Additionally, both USTR and ITC staff suggested we clarify our 

characterizations of section 421’s legislative history and of the Motion 

Systems Corp. v. Bush lawsuit. We modified the report in response to 

their suggestions. USTR and ITC also provided other suggestions to make 

the report more accurate and clear, which we incorporated as appropriate. 

We are sending copies of this report to ITC and USTR, appropriate 

congressional committees, and other interested parties. We will also make 

copies available to others upon request. In addition, the report will be 

available at no charge on the GAO Web site at http://www.gao.gov. 

If you or any of your staff have any questions about this report, please 

contact me at (202) 512-4347 or yagerl@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix II. 

Loren Yager 

Director, International Affairs and Trade 

Agency Comments 

and Our Evaluation 
Appendix I: Objectives, Scope, and 

Methodology 

Page 24 GAO-05-1056 U.S.-China Trade 

To address our objectives, we reviewed U.S. laws and procedures as well 

as relevant World Trade Organization (WTO) agreements and China’s 

accession agreement. To ensure our understanding of relevant laws, 

procedures, and agreements, we spoke with officials from the Office of the 

United States Trade Representative (USTR) and the International Trade 

Commission (ITC). In addition, we interviewed officials from the WTO and 

officials from the government of China. Finally, we spoke with law firms 

that had direct experience in China safeguard cases, as well as law firms 

with broad experience in trade actions against China. 

To describe how the safeguard has been applied thus far, we examined 

each phase of the process. For the ITC phase, we reviewed and analyzed 

each of the determinations the ITC commissioners issued during the five 

China safeguard injury investigations completed as of July 31, 2005, to 

understand the rationale behind them. We further obtained private sector 

views of the ITC process by speaking with law firms that had represented 

petitioners and/or respondents in each of the five China safeguard injury 

investigations. For the USTR phase of the process, we spoke with law 

firms that had represented petitioners and/or respondents that 

participated in each of the three China safeguard remedy investigations 

and reviewed the transcripts of all three USTR hearings. USTR neither 

made the documents related to their analyses nor their recommendations 

available to us. Instead, we relied on detailed briefings from USTR officials 

on the nature and substance of their deliberations culminating in a 

recommendation to the President. For the presidential phase of the 

process, we reviewed each of the President’s three determinations made 

under the China safeguard. To compare the use of the China safeguard 

with the communist country and global safeguards, we reviewed ITC 

import injury investigation statistics and presidential determinations in the 

China, communist country, and global safeguard cases. We found the ITC 

injury statistics to be sufficiently reliable for presenting and contrasting 

ITC’s final disposition of cases brought under these statutes. 

To examine the issues related to the application of presidential discretion, 

we analyzed the reasons the President gave in his decisions not to provide 

import relief. Additionally, we reviewed the legislative history of the China 

safeguard and written and oral testimony before Congress and the U.S.-

China Economic and Security Review Commission. We reviewed the Court 

of International Trade’s decision in the Motion Systems case against the 

government and the submissions of parties to the case. Finally, we 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology 

Page 25 GAO-05-1056 U.S.-China Trade 

analyzed the presidential determinations made under the communist 

country and global safeguards.1

 1

We confined our analysis of presidential determinations under section 201 of the Trade 

Act of 1974 to those made after 1988 when Congress substantially amended the law. 
Appendix II: GAO Contact and Staff 

Acknowledgments 

Page 26 GAO-05-1056 U.S.-China Trade 

Loren Yager (202) 512-4347 

In addition to the individual named above, Adam R. Cowles, R. Gifford 

Howland, Michael McAtee, and Richard Seldin made significant 

contributions to this report. 

Appendix II: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(320328) 
The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To 

have GAO e-mail you a list of newly posted products every afternoon, go 

to www.gao.gov and select “Subscribe to Updates.” 

The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Mail or Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

PRINTED ON RECYCLED PAPER