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New Bill Would Target Alleged Circumvention of AD/CV Duty Orders by Mainland China

Sen. Tammy Baldwin (Democrat-Wisconsin) and Sen. Shelley Moore Capito (Republican-West Virginia) introduced legislation on 23 August aimed at thwarting what they allege is a “sophisticated and government-backed effort” by mainland China to circumvent U.S. antidumping and countervailing duty orders. According to the two lawmakers, the Play by the Rules Act of 2018 (S. 3379) would provide the U.S. Department of Commerce with additional flexibility when reviewing AD/CV anti-circumvention petitions filed against non-market economies like mainland China. The senators contend that this flexibility will allow the DOC to better combat mainland China’s “attempts to cheat our workers and businesses.”

A press release issued by Sens. Baldwin and Moore Capito highlights an alleged attempt by mainland China to circumvent the AD and CV duty orders on hardwood plywood by exporting to the United States a softwood plywood that mimics the characteristics of the merchandise that is subject to AD/CV duties but is not included in the scope of the orders. A U.S. hardwood plywood producer filed an anti-circumvention petition with the DOC in an attempt to remedy this situation but that petition was unsuccessful.

To increase the chances of success of any future anti-circumvention petitions, S. 3379 would amend the minor alterations provisions in the anti-circumvention section of the Tariff Act of 1930 by (1) eliminating with respect to NMEs an exemption that excludes “altered merchandise if the administering authority determines that it would be unnecessary to consider the altered merchandise within the scope of the investigation, order, or finding”; and (2) including with respect to NMEs a new provision that would allow the DOC to consider as part of the minor alterations provisions merchandise that is altered in form or appearance in minor respects (including raw agricultural products that have undergone minor processing) notwithstanding that such merchandise was not included in the scope of the AD/CV investigation, order or finding. The legislation would also amend the Tariff Act of 1930 by enabling the DOC to include within the scope of AD/CV duty orders imports from NMEs that have increased and are interchangeable in the market with imports from those economies that are subject to AD/CV duties.

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