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.

Continue Reading USTR Starts “Review of Necessity” of Section 301 Tariffs

On February 8, 2022, Auxin Solar Inc. (“Auxin”) filed a request that the U.S. Department of Commerce (“the Department”) determine whether the antidumping duty and countervailing duty (“AD/CVD”) orders on crystalline silicon photovoltaic (“CSPV”) cells and modules, i.e., solar cells and panels, from China are being circumvented.  Auxin alleges that certain Chinese CSPV producers

2022 is shaping up to be a critical year for the Biden Administration regarding U.S. international trade policy.  In 2021, the Biden Administration made headway in resolving some of the challenges with United States’ allies that arose during the last Administration, and trying to build bridges in important regions that had perhaps had been neglected.  But in a number of other critical areas, and arguably in the most significant areas, the Biden Administration made little tangible progress over the past year.  The discussion below offers a look back at the key developments in 2021 with respect to U.S. trade relations with the EU, China, the rest of Asia and North America, and a look ahead at what could come in 2022.

Continue Reading The US International Trade Agenda: A Look Back, A Look Ahead

This is the fourth post in a series regarding the Department of Commerce’s revisions to antidumping/countervailing duty regulations.  Prior blog posts in this series can be found here, here, and here.

On September 20, 2021, the U.S. Department of Commerce (“DOC”) published a Final Rule, promulgating new regulations which govern inquiries regarding the circumvention of antidumping and countervailing duty (“AD/CVD”) orders.  These new regulations govern any circumvention inquiries for which a circumvention request is filed, as well as any circumvention inquiry self-initiated by DOC, on or after November 4, 2021.  In addition to clarifying the procedures for anticircumvention inquiries, the Final Rule also significantly expands the potential impact of these proceedings, including by expanding the potential imposition of AD/CVD cash deposits, which may now even reach entries prior to the initiation of the anticircumvention inquiry.

Continue Reading Revisions to AD/CVD Regulations: Circumvention Inquiries

The Final Rule published by the U.S. Department of Commerce (“DOC”) on September 20, 2021, makes substantial modifications to the DOC’s regulations on scope proceedings to be conducted under antidumping and countervailing duty (“AD/CVD”) orders.  These new rules amend the scope inquiry process in a number of places, including, among others: giving the DOC discretion to self-initiate a scope inquiry; requiring more detailed information for a scope inquiry application; eliminating the informal scope inquiry procedure; establishing new time limits for the scope inquiry; and giving interested parties additional time to submit comments.  Perhaps most importantly, these new regulations accelerate the timeline for imposing provisional relief against imports believed to fall within the scope of an AD/CVD order, and permit the imposition of an AD/CVD cash deposit requirement on entries made prior to the initiation of a scope inquiry.

Continue Reading Revisions to the Department of Commerce’s Antidumping / Countervailing Duty Regulation: Scope Proceedings

Under the Enforce and Protect Act of 2015 (“EAPA”), U.S. Customs and Border Protection (“CBP”) is authorized to determine whether covered merchandise has entered the United States through evasion, resulting in the reduction or elimination of otherwise applicable antidumping (“AD”) or countervailing duties (“CVD”) on the merchandise.  19 U.S.C. § 1517.  Under the statute, if CBP “is unable to determine whether the merchandise at issue is covered merchandise,” i.e., subject to an AD or CVD order, CBP may “refer the matter to the {U.S. Department of Commerce (“Commerce”)} to determine whether the merchandise is covered merchandise” pursuant to Commerce’s authority to make AD/CVD scope determinations.  In Commerce’s new regulations, the agency establishes procedures that will govern its handling of these covered merchandise referrals from CBP.  19 C.F.R. § 351.227.  In doing so, Commerce formalizes what has been an ad hoc approach to these covered merchandise referrals under its existing regulations and establishes covered merchandise inquiries as a distinct proceeding segment alongside scope and anti-circumvention inquiries, which seek to answer similar questions regarding coverage of AD/CVD orders.

As relevant background, CBP’s EAPA investigations focus on the specific question of whether certain imports by particular companies are unlawfully evading applicable ADs and/or CVDs.  These investigations follow allegations of evasion (e.g., fraudulent country of origin markings, misclassification, transshipment, etc.) by interested parties (e.g., other U.S. importers of the covered merchandise, a U.S. producer of the domestic like product, or a trade association) and can result in the imposition of various remedies by CBP.  For example, if CBP determines that there is reasonable suspicion that covered merchandise entered the United States through evasion, it may impose “interim measures” including the suspension of liquidation of unliquidated entries, extension of the period for liquidating unliquidated entries, and an array of other measures (e.g., requiring a single transaction bond or the posting of cash deposits).  Continuation of these remedies is available to CBP following a final determination as to evasion, and CBP may also pursue other recourse (e.g., penalty actions) against the companies subject to investigation.

Continue Reading Revisions to the Department of Commerce’s Antidumping / Countervailing Duty Regulations: Covered Merchandise Referrals

The Final Rule published by the Department of Commerce (“Department”) on Monday, September 20, 2021, makes certain modifications to the Department’s regulations on new shipper reviews of antidumping and countervailing duty order. Among other changes, the new regulations increase the burden for parties requesting new shipper reviews by requiring more documentation supporting the sales under review and by requiring certifications from unaffiliated customers.  These changes are intended to enhance the Department’s ability to assess whether new shipper review requests are based on “bona fide” sales.  Several of the more burdensome requirements contained in the proposed version of the rule, issued last August, did not ultimately survive the notice and comment process.  Even so, the additional requirements imposed by this regulatory amendment will likely make it more difficult for parties to seek and obtain new shipper reviews, and could give the Department greater leeway in rejecting such requests.

Provided for by Section 751(a)(2)(B) of the Act, a new shipper review allows a foreign exporter or producer that did not export subject merchandise to the United States during the period of the original antidumping (AD) or countervailing duty (CVD) investigation, and is not affiliated with an exporter or producer that did export, an opportunity to obtain its own dumping or countervailing duty margin after it makes its first U.S. sale on an expedited basis.  Regulations for new shipper reviews are outlined in 19 CFR Section 351.214.

Continue Reading Revisions to the Department of Commerce’s Antidumping / Countervailing Duty Regulations: New Shipper Reviews

On May 27, 2021, the U.S. Department of Commerce (Commerce) issued its affirmative final determination in the countervailing duty (CVD) investigation of Passenger Vehicle and Light Truck Tires (PVLT) from Vietnam, in which it concluded that the Vietnamese Dong (VND) was undervalued, and that this undervaluation constituted a countervailable subsidy under U.S. trade law. This is only the second CVD investigation in which currency undervaluation, as a form of countervailable subsidy, has been at issue (the other case being certain twist ties from China, see here), and is the first instance where Commerce made a final substantive decision as to the currency undervaluation issue.  For that reason, PVLT from Vietnam establishes new law in several important areas, and is likely to be used as a template for future Commerce decisions in this area.

Continue Reading Currency Undervaluation as a Countervailable Subsidy: The United States Takes Its First Step

On November 24, 2020, the U.S. Department of Commerce (“Commerce”) issued a preliminary affirmative determination in the countervailing duty (“CVD”) investigation of twist ties from China. What is particularly noteworthy about this preliminary determination is Commerce’s decision to countervail the undervaluation of China’s currency, the Renminbi (“RMB”). This marks only the second occasion – following the investigation of Passenger Vehicle and Light Truck (“PVLT”) Tires from Vietnam earlier this year – that Commerce has countervailed a country’s undervalued currency, and the first time it has done so against China. As discussed further below, Commerce’s determination relied on an analysis of the RMB from the U.S. Department of the Treasury (“Treasury”) which differed in meaningful respects from Treasury’s analysis of the Vietnamese Dong (“Dong”) in the investigation of PVLT Tires from Vietnam, suggesting that a less objective, more qualitative analysis may be applied against the RMB in future cases.

Under U.S. law, a subsidy program is countervailable when it meets three criteria. Specifically, the program must constitute (a) a financial contribution provided by a government authority or public body, (b) to a specific firm or industry, that (c) yielded a benefit to the recipient.

The currency undervaluation allegations examined in the PVLT Tires from Vietnam and Twist Ties from China investigations were based on regulations issued by Commerce earlier this year to interpret these terms in the context of currency undervaluation. Regarding the requirement of specificity, Commerce’s new rule provides that enterprises that buy or sell goods internationally (i.e., enterprises in the traded goods sector) may comprise a “group” of enterprises for specificity purposes.

Continue Reading Commerce Takes Action Against Allegedly Undervalued Currencies