JAKARTA (TheInsiderStories) – The United States (US) finalized a new rule to impose anti-subsidy duties on products from countries that it has determined undervalue their currencies against the dollar, the country’ commerce department said on Monday (02/03). The new rule would amend the normal countervailing duty process to include new criteria for currency undervaluation.
The new rule also could put goods from other countries at risk of higher tariffs, including China, Germany, Ireland, Italy, Japan, Malaysia, Singapore, South Korea, Vietnam and Switzerland, Reuters reported. Those countries were all listed on the Treasury Department’s semi-annual currency report’s “monitoring list,” which tracks currency market interventions, high global current account surpluses and high bilateral trade surpluses.
The move could provide a fresh irritant in US-China trade talks just weeks after the world’s two largest economies signed a phase-one trade agreement and come a day after Beijing accused Washington of spreading fear about the fast-spreading coronavirus that originated in China. The new rule would allow the Commerce Department to impose duties on China, even though the US recently removed its designation of China as a currency manipulator as part of the phase one trade deal.
Commerce said it would generally rely on the Treasury’s expertise in determining undervaluation, but the two processes could come to different conclusions since they resulted from different statutes. The draft rule was first published in May.
It said it would only impose countervailing duties on imports of specific products that both benefit from countervailable subsidies and are found by the US International Trade Commission to injure US industries. The rule would not result in the application of such duties to all imports from a given country, because not all such imports injure US industries, it said.
Commerce said the new rule was a measured response to longstanding, bipartisan calls to use existing laws to address unfair foreign currency practices, and was part of a broad push by the President Donald Trump administration to crack down on trade imbalances.
“The Trump Administration is doing the right thing by confronting the problem head-on,” it said in a statement, adding it would not normally include monetary and related credit policy in determining whether a government had acted to reduce the exchange rate of its currency to bolster its domestic industry.
US Commerce Secretary Wilbur Ross said the new rule marked another important step intended to “level the playing field for American businesses and workers,” stressing the rule would amend the normal countervailing duty process to include new criteria for currency undervaluation, including a finding of government action on the country’s exchange rate.
- Reuters contributed to this report
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