Congress Passes Legislation to Maintain CVD Orders

March 6, 2012

On March 6^th and 7^th, 2012, the U.S. Senate and House of Representatives passed legislation (S.2153 and H.R.4105) clarifying that the U.S. Department of Commerce (DOC) can apply the countervailing duty (CVD) provisions in the Tariff Act of 1930 to nonmarket  economy countries (NMEs). These bills follow a December 2011 ruling by the U.S. Court of Appeals for the Federal Circuit (CAFC) in GPX v. United States, which determined that the DOC could not apply U.S. CVD laws to NME countries, including China. The CAFC held that applying CVD laws to NMEs was contrary to Congressional intent. The CVD legislation, which Congress passed to overturn the CAFC’s ruling, will now be sent to the President, who is expected to sign it into law.

The CVD legislation passed in the House and Senate amends the Tariff Act of 1930 by adding sections applying its CVD provisions to NMEs. The amended section applies to proceedings initiated after November 20, 2006. Additionally, the legislation is intended to address a 2011 adverse World Trade Organization (WTO) Appellate Body ruling which found that a “double remedy” may occur in situations where countervailing duties are applied to NME exports simultaneously with antidumping duties calculated using a “surrogate value” methodology. The CVD legislation provides authorization for the DOC to adjust antidumping duties to address such “double remedies” under certain circumstances in which the foreign exporter can demonstrate that such a double remedy has occurred and where the DOC is able to reasonably estimate the extent to which the countervailable subsidy, in combination with the use of normal value, has increased the weighted average dumping margin.

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