Source: https://thelawreviews.co.uk/edition/the-international-trade-law-review-edition-5/1197834/united-states
Timestamp: 2020-07-16 01:22:36
Document Index: 686001006

Matched Legal Cases: ['§2132', '§4305', '§1701', '§1671', '§351', '§207', '§1673', '§1677', '§1677', '§1677', '§1671', '§1677', '§1671', '§1671', '§1671', '§1671', '§1671', '§1671', '§1671', '§1671', '§1675', '§1677', '§1675', '§1675', '§2252', '§1337', '§1862', '§3512']

United States - The International Trade Law Review - Edition 5 - TLR - The Law Reviews
The AD and CVD laws are the best-known and most frequently used trade remedies laws in the United States. The AD laws are designed to provide a remedy (in the form of an import duty) for domestic industries that have been injured or threatened with injury by imports of unfairly priced (dumped) merchandise, whereas the CVD laws are designed to provide a remedy (also in the form of an import duty) for domestic industries that have been injured or threatened with injury by imports of merchandise produced or exported by companies benefiting from impermissible subsidies. Thus, each type of case features two components: an injury evaluation,2 conducted by the US International Trade Commission (ITC), and an analysis of the alleged wrongdoing – namely dumping (in AD cases) or subsidisation (in CVD cases) – conducted by the US Department of Commerce (the Department, or Commerce). Only if the agencies find both injury and dumping does an AD order issue, and likewise only if the agencies find both injury and unlawful subsidisation does a CVD order issue.
If Commerce calculates a margin of dumping or subsidisation above the de minimis level (typically 2 per cent in AD investigations and 1 per cent in CVD determinations), then it issues an affirmative determination.10
Import surcharge under Section 122 of the Trade Act of 1974 (19 USC §2132) Presidential Proclamation To address serious US trade deficit, significant dollar depreciation, or correct international balance of payments disequilibrium Effective: immediately Duration: 150 days, can be extended by Congress Up to 15 per cent import duties
Action under Trading with the Enemy Act of 1917 (50 USC §4305) Presidential proclamation Restrict trade with countries hostile to the US Immediate and unlimited Unlimited
Action under Int'l. Emergency Economic Powers Act of 1977 (50 USC §1701 et seq.) Presidential declaration Declaration of national emergency with respect to a foreign threat Immediate and unlimited Unlimited
US AD and CVD proceedings are subject to both US law and agency regulation: the law is set out in 19 USC §§1671 and 1673 (for AD and CVD investigations, respectively), and the regulations appear in 19 CFR §351 et seq. and 19 CFR §207 et seq. (for Commerce's and ITC's regulations, respectively). Importantly, both agencies' regulations provide for the creation of 'administrative protective orders' or 'APOs', which ensure that the sensitive data that parties are obliged to provide in AD/CVD proceedings remain confidential to foreclose any possibility of the cases being used opportunistically to troll for competitive information.
Prior to the Trump administration, Section 232 had not been deployed since President Ford levied 232 tariffs on oil import more than 40 years ago. But in April 2017, the Commerce Secretary H Wilbur Ross – at President Trump's direction – initiated Section 232 investigations to determine whether imports of steel and aluminium products represent a threat to US national security. Following a lengthy and politically charged investigatory process that included Department of Defense consultations, public hearings, and the submission of written comments, in January 2018 Secretary Ross transmitted his reports on the results of those investigations – in both cases, he concluded that the imports do indeed threaten US national security. In light of that finding, he recommended several alternative measures that in his view would mitigate that threat – those measures included quotas, tariffs and combinations of the two. Ultimately, President Trump announced (in early March) that he intended to apply tariffs of 25 per cent and 10 per cent respectively to steel and aluminium imports. The announcement was followed within a few weeks by formal presidential proclamations to that effect indicating that the tariffs would take effect in 15 days but exempting Canada and Mexico in order to facilitate ongoing discussions with those countries.36 Implementation of the tariffs subsequently was delayed to 1 June 2018, to allow for discussions and negotiations with trading partners.
Initially, those discussions were somewhat fruitful – on 28 March 2018, South Korea achieved a permanent exemption from the steel tariff by agreeing to an annual quota (which also included quarterly caps), and in early May Argentina, Australia and Brazil were granted similar exemptions – for Argentina and Brazil, the exemptions were conditioned on quotas similar to those negotiated with South Korea, whereas Australia's exemption was a function of certain security considerations and accommodations that have not been publicly specified. But negotiations with the European Union eventually came to an impasse, and on 1 June 2018 the tariffs went into effect as to the EU and all the other countries that had declined to negotiate quota arrangements. In the interim, a number of trading partners including Canada, the EU, India, Japan, Mexico, Russia and Turkey have filed complaints in the WTO or announced that they intend to impose retaliatory tariffs on imports from the US. The Trump administration's position to this point has been that the 232 tariffs are not 'safeguard' tariffs but rather national security measures and as such do not fall within the scope of the WTO agreements.
On 23 May 2018, the Secretary of Commerce announced the commencement of another Section 232 investigation, this time to determine whether imports of automobiles (including cars, sport utility vehicles, vans and light trucks) and auto parts threaten US national security. A formal Federal Register notice followed, setting the schedule for the submission of comments and a public hearing on 19 and 20 July 2018.38 Some members of Congress have suggested that the President's use of 232 generally and in the automotive space in particular is unjustified, and at the time of writing there is a Senate bill pending that would require the President to secure Congressional approval prior to applying Section 232 tariffs; House Minority leader Mitch McConnell, however, has indicated that he will not bring such legislation up for vote.39
In United States – Anti-Dumping Measures on Certain Oil Country Tubular Goods from Korea,54 Korea contended that the Department of Commerce's 'viability' test in AD cases is deficient. In AD investigations and reviews involving market economies, the Commerce Department typically calculates the margin of dumping based on a comparison of US prices with home market prices, both sets of prices being adjusted to yield a 'factory door to factory door' comparison. However, to the extent that home market sales volumes are small relative to US sales volumes, the Commerce Department has the discretion to conclude that home market pricing is not a 'viable' basis for comparison and therefore use other benchmarks. Typically, the first of these is sales to third countries; if they too are relatively small, then the agency will rely on a constructed value based on a build-up of costs plus a reasonable profit. In the OCTG case, the Commerce Department concluded that neither home market sales nor third country sales were viable benchmarks, and accordingly the agency derived and relied on a constructed value. Korea contested that finding, but the WTO panel largely upheld the Commerce Department's methodology.55 Although the panel took issue with certain of the Commerce Department's findings, including the profit rate that the agency used in deriving its constructed value, in general it supported the discretion of agencies to determine whether and when to toggle between third-country sales and constructed value.
1 Alexander H Schaefer is a partner at Crowell & Moring LLP. The information in this chapter was accurate as at August 2018.
3 19 USC §§1673(a) and 1677(34).
5 19 USC §1677b(c).
7 19 USC §§1677(35) and 1677b.
8 19 USC §§1677(5) and 1677(5A).
10 19 USC §§1671d(a) and 1673d(a).
11 19 USC §1677(7).
13 19 USC §§1671d(b) and 1673d(b).
14 19 USC §§1671a(b) and 1673a(b).
15 19 USC §§1671a(c)(4) and 1673a(c)(4).
16 19 USC §§1671b(a)(1) and 1673b(a)(1).
17 19 USC §§1671b and 1673b.
18 19 USC §§1671b(d) and 1673b(d).
19 19 USC §§1671d(c)(2)–(c)(4) and 1673d(c)(2)–(c)(4).
20 19 USC §§1671d(c)(1)(B)(ii) and 1673d(c)(1)(B)(ii).
21 19 USC §1675(a)(1).
22 19 USC §1677g.
24 19 USC §§1675(c) and 1675a.
25 19 USC §1675(d).
27 In the past decade, only one trade case has reached the Supreme Court. See United States v. Eurodif S.A., et al., 555 U.S. 305 (2009).
28 See 19 USC §2252 et seq.
32 See 19 USC §1337.
33 See 19 USC §1862.
34 See 19 USC §3512(a)(1).
40 See Addressing China's Laws, Policies, Practices, and Actions Related to Intellectual Property, Innovation,and Technology, 82 Fed. Reg. 39,007 (17 August 2017).
44 See Bell Supply Company LLC v. United States, 179 F.Supp.3d 1082 (CIT 2016).
50 United States – Conditional Tax Incentives for Large Civil Aircraft, DS487.
53 www.defense-aerospace.com/articles-view/release/3/186523/wto-reverses-ruling-on-boeing-tax-breaks%2C-airbus-looks-to-next-case.html.
54 United States – Anti-Dumping Measures on Certain Oil Country Tubular Goods from Korea, DS488.
55 United States – Anti-Dumping Measures on Certain Oil Country Tubular Goods from Korea, DS488, Doc. No. WT/DS488/R (14 November 2017).