Obama signs China countervailing duty bill

ERJ staff report (TB)

Tyre Business staff report

Washington, DC - President Obama has signed into law a bill that allows the US Commerce Department to apply countervailing duties to non-market economies such as China that subsidise manufacturers and importers.

The bill, which arose directly from a court case involving high countervailing duties placed on certain OTR tyres from China, was hailed by labour unions and domestic OTR tyre makers as a boon to domestic manufacturing.

The Chinese Ministry of Commerce, however, condemned the legislation, saying it violated the rules of the World Trade Organisation.

The countervailing duty bill passed the Senate by unanimous voice vote March 5 and the House of Representatives by 370-39 the next day. Obama signed the legislation 13 March.

In a statement after the signing, Obama said the bill protects US industries that employ tens of thousands of people in nearly 40 states.

“Because of subsidies from foreign governments, some of their foreign competitors are selling products at an artificially low price,” Obama said. “That needs to stop.”

Obama also said the US was joining with Japan and various European nations to build a trade case against China involving rare earth materials, which are used to make advanced batteries and other high-tech products.

“We want our companies building those products right here in America,” the president said. “But to do that, American manufacturers need to have access to rare earth materials-which China supplies.”

In a 7 March statement distributed by Xinhua, the Chinese government's official news agency, Chinese Commerce Minister Chen Deming said the new US law is not in line with international trade agreements.

“We don't have the obligation to abide by any domestic laws and regulations that are not in line with the rules of international organisations,” Chen said. “Let me be clear: there are no prohibitive subsidies handed down by the Chinese central government.”

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