US to consider currency manipulations as countervailable subsidy
28 May 2019
The US Department of Commerce has issued a notice of proposed rulemaking to impose countervailing duties on countries that act to undervalue their currency relative to the dollar, resulting in a subsidy to their exports. US law defines a countervailable subsidy as a financial contribution from a government or public entity that is specific and that provides a benefit to a foreign producer or exporter.
“This change puts foreign exporters on notice that the Department of Commerce can countervail currency subsidies that harm US industries,” said Commerce Secretary Wilbur Ross. “Foreign nations would no longer be able to use currency policies to the disadvantage of American workers and businesses. This proposed rulemaking is a step toward implementing President Trump’s campaign promise to address unfair currency practices by our trading partners.”
The draft regulation identifies the criteria the Department would use to determine if countervailing duties should be imposed for currency undervaluation.
Since the beginning of President Trump’s term in office, the strict enforcement of US trade laws has been a focus of his administration. The Commerce Department has initiated 164 new investigations just in the area of antidumping and countervailing duty enforcement – a 215 per cent increase from the comparable period in the previous administration.
The Enforcement and Compliance unit within the International Trade Administration of the Department of Commerce is responsible for countervailing duty proceedings and determinations. Along with antidumping laws, countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of unfairly traded imports into the United States.
The Commerce Department currently maintains 481 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade.