Tagged: Countervailing Duty Statute

On December 19, 2011, in GPX Intl. Tire Corp. v. U.S., the Federal Circuit affirmed the International Court of Trade’s ruling that countervailing duty law does not apply to a non-market economy (“NME”) country, such as China. We previously summarized the Federal Circuit’s ruling. Recently, the United States and Titan Tire Corporation petitioned for a rehearing of the Federal Circuit’s decision. While the petition was pending, Congress passed legislation to apply countervailing duty law to NME countries. The new legislation applies retroactively and applies to this case. Congress’ intent plainly was to overrule the Court’s previous decision. Further, the new legislation contains a provision regarding an adjustment of antidumping duties on imported goods. This so-called “double counting” provision does not apply to the rehearing proceeding. Although the scope of the new legislation is clear, the appellees argue that it is unconstitutional. As a result, the Federal Circuit ordered that the Trial Court should decide this issue.

Last week in GPX Intl. Tire Corp. v. U.S., the Federal Circuit decided whether both antidumping and countervailing duties may be imposed on a non-market economy (“NME”) country like China. The Federal Circuit affirmed the International Court of Trade’s (“ITC”) ruling that countervailing duty law does not apply to an NME country, but for different reasons than the ITC. Earlier, the ITC had reasoned that the U.S. Department of Commerce’s (“Commerce”) 2007 interpretation of the law was “unreasonable” because of the high probability of “double counting.” Alternatively, the Federal Circuit came to its decision by looking at the statute’s Congressional intent. Specifically, when Congress amended and reenacted countervailing duty law in 1988 and 1994, the Federal Circuit concluded that government payments could not be characterized as “subsidies” in an NME context. Therefore, countervailing duty law does not apply to NME countries.