Earlier this week, the COVID-19 Accountability Act was introduced in the Senate and the House by Rep. Senator Lindsey Graham and Rep. Doug Collins respectively.  While the text of the draft legislation is not yet available, a summary indicates that it would require within sixty days that the President certify to Congress that China has:

“Provided a full and complete accounting to any COVID-19 investigation led by the United States, its allies, or United Nations affiliates, such as the World Health Organization (WHO);

  • Closed all wet markets that have the potential to expose humans to health risks; and
  • Released all pro-democracy advocates in Hong Kong that were arrested in the post COVID-19 crackdowns.”

If there is no such certification, the Act would then authorize the President to impose at least two of a variety of sanctions to hold China accountable, including travel bans, visa revocations, asset freezes, restricting U.S. financial institutions from loaning money to Chinese businesses, and barring Chinese firms from being listed on American stock exchanges.  Such sanction would be effective until the certification could be made.
Continue Reading COVID-19 Accountability Act – New Potential Sanctions on China

On April 28, 2020, the Department of Commerce’s Bureau of Industry Security (“BIS”) published three separate rules which, in response to the Administration’s conclusion that “civil-military integration” in China is increasing, impose significant additional restrictions on the export of dual-use items to strategic rivals including China, Russia, and Venezuela.  These rules, when implemented, will have an especially acute effect on transactions with China.  Specifically, consistent with the Administration’s conclusion that these countries present national security and other foreign policy concerns, BIS restricted exports, re-exports, and in-country transfers to these destinations by: 1) issuing a final rule expanding end-use and end-user restrictions related to China by expanding the scope of prohibitions to include “military end-users” in China and expanding the definition of “military end use”,  among other changes; 2) issuing a final rule removing a license exception that allows the export of some items to certain countries that present national security concerns, including China and Russia, provided that the end-use was civilian (license exception CIV); and 3) issuing a proposed rule narrowing the scope of a license exception that allows the re-export of some items that present national security concerns (license exception APR).

These changes, which are largely effective on June 29, 2020, will create additional hurdles in transactions with China, Russia, and Venezuela. 
Continue Reading Bureau of Industry and Security Imposes Significant Additional Restrictions on Exports to China, Russia, and Venezuela

The U.S. Department of Commerce announced on Wednesday that it is self-initiating an inquiry into whether U.S. imports of corrosion-resistant steel products (CORE) from Costa Rica, Guatemala, Malaysia, South Africa, or the United Arab Emirates using hot-rolled or cold-rolled substrate from China and Taiwan are circumventing existing antidumping (AD) and countervailing (CVD) duties.  This is

President Xi Jinping announced on Tuesday that China will begin a “new phase of opening up” that will shift the Chinese economy towards a market-based model.  While it is not the first time the Chinese President has made these or similar promises, the remarks clearly are designed to forestall threatened U.S. tariffs and reduce  trade tension with the United States.

The promised reforms include strengthening protections for intellectual property, increasing foreign access to financial and manufacturing sectors of the Chinese economy, and lowering tariffs on vehicles and other goods.

President Xi addressed the automobile industry by promising to eventually reduce ownership restrictions for foreign car makers and to lower tariffs on foreign vehicles.  The U.S. automobile industry currently faces relatively high tariffs when shipping to China.  While on its face the announcement Tuesday appears positive for U.S. auto manufacturers, President Xi noted that the trade reforms would only be available to those countries that do not “violate” rules established by the WTO.  Given that China formally challenged the U.S. in the WTO on Tuesday regarding steel and aluminum tariffs, the availability of Chinese trade concessions to American automotive manufacturers remains elusive. 
Continue Reading China Promises Economic Reforms and to Lessen Tariffs on Automobiles

According to Bloomberg, the Trump administration is considering using the International Emergency Economic Powers Act (IEEPA) to block Chinese investments in industries or technologies “deemed important” to the U.S.  (This statute has been used primarily to authorize economic sanctions and embargoes administered by the Office of Foreign Assets Control).  To utilize IEEPA, the President

Earlier this month, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) denied an appeal by Capella Sales & Services Ltd., an importer of aluminum extrusions from China, in which the company challenged the countervailing duty margin applied to its entries at liquidation, arguing that a lower rate should have been applied by U.S. Customs and Border Protection.

Capella did not participate in U.S. Department of Commerce’s (“Commerce”) 2011-2012 administrative review of aluminum extrusions from China.  As a result, its entries were subject to the 374.15% “all others” rate under the countervailing duty order.  In connection with other litigation, the 374.15% “all others” rate was reduced to 7.37% in October 2015 based on challenges brought by several other importers of aluminum extrusions. 
Continue Reading Federal Circuit Denies Lower Duty Rate for Chinese Aluminum Extrusion Importer

Late last week, the Government of China announced that it would be removing export taxes on many steel products, including wire, rods, bars, billets, and stainless steel plate, as of January 1, 2018.  The move is part of a number of tax changes.  The steel export tax has not prohibited massive volumes of Chinese steel from being shipped to other markets in the face of overwhelming overcapacity at home.  But the absence of the export tax will make it even easier for Chinese steel producers to export steel products around the world.  Notably, China typically adjusts export tax levels on an annual basis as a policy measure to encourage or discourage certain exports.  Thus, this latest decision signals not only the Government of China’s continued active intervention in the market, but its support for even greater exports of Chinese steel, which the world can hardly absorb.
Continue Reading China to Encourage Even More Steel Exports

On October 26, 2017, the Department of Commerce  announced the results of an investigation concluding that China is a non-market economy (“NME”) country for purposes of Commerce’s antidumping analysis.  Commerce’s decision continues the long-standing practice of the agency with respect to the antidumping methodology it applies to cases involving China.

Commerce was spurred to review its position on China’s NME status, last addressed in 2006, following the December 11, 2016 change in China’s Protocol of Accession to the World Trade Organization (“WTO”).  By way of background, the WTO Antidumping Agreement permits WTO member countries to impose duties on dumped imports.  Those duties are calculated as either the difference between the imported product’s export price and the comparable home market price, or the difference between the export price and a constructed value based on the product’s cost of production.  Sometimes, however, those home market prices or costs of production do not reflect market forces, particularly in NME countries.
Continue Reading Commerce Continues China’s Status as a Non-Market Economy