On November 18, 2022, the Department of Commerce (“the Department”) published a notice of advanced proposed rulemaking seeking public comments with respect to its methodology in determining the existence of a particular market situation (“PMS”) that distorts the cost of production in the ordinary course of trade in the context of its antidumping duty (“AD”) proceedings. This PMS provision was added to Section 773(e) of the Tariff Act of 1930, as amended, through the Trade Preferences Extension Act in 2015. As a result of several adverse court decisions since the passage of this amendment, the Department intends to reconsider its approach to determining the existence of a PMS, and to issue a new regulation to identify the types of information that should be considered when determining whether a PMS distorting the cost of production exists. Comments are due no later than December 18, 2022.
Last week, the U.S. Department of Commerce (“DOC”) concluded that the Russian Federation will be considered a non-market economy (“NME”) for future antidumping duty (“AD”) proceedings. This decision reversed the DOC’s 2002 conclusion that Russia was a market economy country, a conclusion that had been reaffirmed by the DOC as recently as 2021. This decision could have significant consequences for companies importing products from Russia subject to AD orders as, generally speaking, the use of the NME methodology results in higher AD margins. As a result, companies involved in certain industries, particularly in the steel, fertilizer and chemical sectors, could feel an impact from this decision after it begins to take effect.…
On October 12, 2022, the Office of the U.S. Trade Representative announced it would be seeking public comments regarding the effectiveness of the actions related to the Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. The two specific actions under review are the imposition of additional tariffs under Section 301 on products on List 1 and List 2 (covering $34 billion and $16 million in imports as of 2018, respectively), which were subsequently modified by the imposition of List 3 and List 4A (totaling $325 billion in imports as of 2018). This notice marks the next step in the USTR’s “review of necessity,” a statutory-mandated four-year review process. A portal for submitting these comments will open on November 15, 2022, with a deadline of January 17, 2023.
Continue Reading USTR Announces Next Steps in Statutory Four-Year Review of China 301 Tariffs
On September 24, 2022, the Office of the United States Trade Representative (USTR) announced the successful resolution of a labor complaint brought under the Rapid Response Labor Mechanism (RRM) of the United States-Mexico-Canada Agreement (USMCA). This case marked the fifth time that the RRM has been invoked since its inception in 2020. The RRM represents the most tangible aspect of the Biden Administration’s worker-centric trade policy. As the number of these cases goes up, companies with production activities in Mexico–and particularly those in the automotive sector–should be mindful of their commitment to their workers’ labor rights.
Continue Reading The USMCA’s Rapid Response Labor Mechanism: An Increasingly Important Component of the Biden Administration’s “Worker-Centric” Trade Policy
Since the beginning of the Biden Administration, and particularly since earlier in 2021, U.S. companies and importers have been looking forward to the prospect of a reduction in the tariffs originally imposed in 2018 and 2019 following the Section 301 investigation against China or, at a minimum, a resumption of the exclusion process that was largely suspended in 2020 aside from extensions in limited circumstances. While several avenues for the elimination or reduction of Section 301 duties have presented themselves, to date, none have been adopted. Nevertheless, the coming months may offer several opportunities for U.S. companies interested in reducing their Section 301 duty liability to advocate for relief.
Continue Reading Section 301 Duties on Imports from China: Current Status of Prospects for Relief
The United States has requested dispute settlement consultations with Mexico under Chapter 31 of the United States-Canada-Mexico Agreement (“USMCA”) concerning a range of energy policies adopted by the Government of Mexico that the United States believes discriminate against U.S. interests in violation of the USMCA. According to a press release issued by the Office of the U.S. Trade Representative Katherine Tai:
Mexico’s policies have largely cut off U.S. and other investment in the country’s clean energy infrastructure, including significant steps to roll back reforms Mexico previously made to meet its climate goals under the Paris Agreement. Mexico’s policy changes threaten to push private sector innovation out of the Mexican energy market. To reach our shared regional economic and development goals and climate goals, current and future supply chains need clean, reliable, and affordable energy.
Canadian Trade Minister Mary Ng has indicated that Canada has joined the United States in challenging these actions through the same dispute settlement mechanism. This is the first time that the United States and Canada have both pursued USMCA dispute settlement consultations with Mexico on policies of mutual concern.…
On June 6, 2022, President Biden issued a declaration of emergency with respect to the availability of electricity generation capacity in the United States, and pursuant to this declaration, authorized the U.S. Secretary of Commerce to permit certain solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam to be temporarily imported without antidumping duty and countervailing duties (“AD/CVD”) in response to an ongoing anticircumvention proceeding.
As background, U.S. Department of Commerce (“Commerce”) is currently conducting an anticircumvention inquiry into whether imports from these four Southeast Asian countries are circumventing the AD/CVD orders on crystalline silicon photovoltaic (“CSPV”) cells and modules, i.e., solar cells and panels, from China. If Commerce makes an affirmative circumvention finding, solar cells and modules manufactured in these countries may be presumed to be subject to the China CSPV AD/CVD orders. Due to the possibility that high AD/CVD rates could then apply to these imports, many participants in the renewable energy industry were concerned that this investigation could adversely affect the U.S. solar industry, and negatively impact U.S. clean energy efforts. Questions about the retroactive nature of any tariffs that could be imposed through this anticircumvention proceeding due to the recently modified regulations also have caused uncertainty in the industry, which in turn led several market participants to announce suspensions of U.S. solar projects.…
On June 1, 2022, the United States and Taiwan announced the launch of the “U.S.-Taiwan Initiative on 21st Century Trade” (“Initiative”) designed to strengthen bilateral economic and trade relationships between the two parties. Representatives from the United States and Taiwan intend to meet later in June to “develop an ambitious roadmap for negotiations for reaching agreements with high standard commitments and economically meaningful outcomes” in 11 specific areas affecting bilateral trade and economic cooperation. Concurrent with the launch of the Initiative, the U.S. Trade Representative (“USTR”) published a request for public comments in order to help the agency develop negotiating objectives and positions for these upcoming meetings. Comments must be filed with USTR by July 8, 2022.
Continue Reading The Launch of the U.S.-Taiwan Initiative On 21st Century Trade
On May 23, 2022, President Biden announced the launch of negotiations for the long-awaited Indo-Pacific Economic Framework for Prosperity (“IPEF”). The IPEF had been under consideration for some time, but was finally announced during the President’s first trip to Asia.
These negotiations are beginning with a total of 12 countries in addition to the United States: Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. Many of the countries on the list had been predicted (e.g., Australia, Indonesia, Japan, Korea, New Zealand and Singapore), but some were unexpected (e.g., Brunei and the Philippines). While Taiwan had indicated interest in joining, it was excluded from this launch largely because of concerns that its inclusion would prove an irritant to China, which might in turn dissuade other countries from joining. Nevertheless, there appears to be support in the Administration and elsewhere for continued bilateral engagement on trade and investment issues. On May 27, 2022, Fiji also joined the IPEF, the first Pacific Island nation to join the framework.…
The Office of the United States Trade Representative (“USTR”) has recently initiated a statutory four-year review of the two actions taken under Section 301 of the Trade Act of 1974, as amended, in the investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. The two specific actions under review are the imposition of additional tariffs under Section 301 on products on List 1(covering $34 billion in imports as of 2018) and List 2 ($16 million in imports), which were subsequently modified by the imposition of List 3 and List 4A.
This “review of necessity” is being conducted pursuant to 19 U.S.C. § 2417(c), which obligates USTR to revoke any action taken under Section 301 after four years unless parties that benefit from that action requests its continuation. If continuation is requested, USTR is then required to evaluate the “effectiveness in achieving the objectives of Section 301” and the “effects of such actions on the United States economy, including consumers” for any action taken under Section 301.…