1. US China Trade Disputes: How to Respond to US Antidumping and Countervailing Cases
William Perry, Partner
Dorsey & Whitney
Formerly Office of General Counsel, U.S. International Trade Commission and Office of Chief Counsel and Office of Antidumping Investigations, U.S. Commerce Department
See blog, and

2. Trade Cases Increase in US and China
US 121 Outstanding antidumping / countervailing orders against Chinese products
75 Metals, Chemicals and Steel—Injuring and in some cases destroying US downstream industries
New US AD and CVD cases—Solar Cells/Solar Products, Tires and now Office Paper—billions of dollars in imports
In China, Antidumping and Countervailing Duty cases against US Chicken, Polysilicon, and automobiles billions of dollars in exports

3. Overview of US AD and CVD Law
To win an antidumping or countervailing duty case, the Petitioner(s), usually the US Industry:
Must prove dumping or subsidization at the Commerce Department
Injury or Threat of Material Injury at the U.S. International Trade Commission (“ITC”)—Entire Domestic Industry
Year long Proceeding and Jurisdiction—In Rem
Because of its methodology, Commerce must find dumping and subsidization in cases against China
Recently 20 years of practice overturned and more difficult for Chinese state-owned companies to get their own antidumping rates

4. What is Dumping?
Market economy—US Sales below Normal Value—home market prices or Fully Allocated Cost of Production
China—Nonmarket Economy Country—Do not Use Actual Prices and Costs in China
Construct Cost—Factors of Production
Surrogate Values from Surrogate Country—Used to be India now 5 to 10 surrogate countries, such as Thailand, Indonesia, Philippines, Ukraine, Bulgaria and Columbia
Hardwood Plywood—Philippines 0 Bulgaria 57%
CVD Duties to Countervail a subsidy, a benefit, money, given by the government to a Chinese company for exporting products OR to a specific industry

5. China WTO Agreement – NME
Dec 11, 2016—15 Years after WTO Agreement
Section 15 of China WTO Accession Agreement provides:
15. Price Comparability in Determining Subsidies and Dumping…
(a)(ii) The importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China…
(d) In any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession.
Section 15 of the China WTO Agreement came from the US China WTO Agreement and a US demand
But US Government’s position in a treaty and not the law so no change

6. Retroactive Liability for US Importers
US Importers pay AD/CVD duties, not Chinese companies
Retroactive liability—Cash Deposits versus Duties
Actual liability determined during annual review investigations
Total missing retroactive AD duties well over $1billion
$800 million in AD Duties on Just Four Products—mushrooms, garlic, crawfish and honey.
Intense Political Pressure by Congress on Customs to Enforce AD and CVD orders

7. Action Versus Inaction – Chinese Exporters Need to Participate
Must participate in Initial Investigation and Review Submit Separate Rates Applications
AD and CVD Orders 5 to 30 years
If Chinese companies shut out, should do the review investigation—Solar cells vs PVA, Saccharin, Indigo
If the Chinese company keeps fighting eventually the rates come down
Have driven AD rates from over 200 to 300% to 0% and made Chinese companies exclusive exporters
But Importers must make sure Chinese companies participate because importer liable

8. Importers Must Act
Do not say this is the foreign exporter’s problem. Importer is liable, not the foreign exporter, and can face millions, if not 10s of millions in retroactive liability.
AD and CVD Orders 5 to 30 years Cover Chinese imports
Have Chinese accountants running US Legal Cases with significant legal issues
Importers Must be active at the Commerce Department and the ITC and Must Have Some Control over the situation in China because the importer is liable, not the Chinese company
Court appeals are important. AFA rate of 157% cut in half at Court
Political Problem—Many importers have abandoned the political field in Washington DC in AD and CVD cases
But not only US importers being smashed but also downstream US industries—US Magnesium Dye Casting Industry