The Chinese Ministry of Commerce (“MOFCOM”) announced on November 6, 2009 that it had launched anti-dumping (“AD”) and countervailing (“CVD”) investigations against sedans and sport utility vehicles of cylinder capacity ≥ 2000cc originating from the United States. We are providing on this blog an English translation of the CVD notice. This announcement represents the third CVD investigation initiated against U.S. products in less than six months. So far, Chinese investigations have targeted CVD investigations only against products originating from the United States.
According to the November 6 notice, MOFCOM will investigate 24 alleged subsidy programs, all identified as being provided by the U.S. Government. However, four of those alleged programs are tax incentives and other assistance provided by the state of Michigan, which in the U.S. federal system is a distinct sovereign and not part of the U.S. Government. ( In China, all regional and local governments are subordinate to the central government. In the U.S., the states have distinct powers and are not subordinate.)
China adopted its regulations on CVD investigations in October 2001, and the Regulations Of The People’s Republic Of China On Countervailing Measures entered into force at the beginning of 2002. However, China did not initiate its first CVD investigation until June 1, 2009.
The vocal U.S. steel industry was the first target of Chinese countermeasures. The product under investigation was grain-oriented flat-rolled electrical steel, and an Ohio company – the AK Steel Corporation – and a Pennsylvania producer – the ATI Allegheny Ludlum Corporation – were singled out as respondents.
Soon after President Obama imposed additional tariffs on Chinese commercial, low-cost tires as a China-specific safeguard measure, MOFCOM issued a press release saying it would review AD and CVD petitions against U.S. poultry products and cars. Many observers rushed to label this announcement as “retaliation.” However, both products have been the subject of trade disputes between China and the United States for a long time. Our previous article “Trade War?” analyzed the safeguard action and recent trade disputes between the two sides, querying whether China was retaliating in the opening salvo of a trade war. The initiation of investigations into U.S. automobiles may require an adjustment in our analysis. We expect to post soon an analytical article on China’s investigations of alleged U.S. subsidy programs, particularly as they refer to U.S. automobiles.
美国钢铁企业首受其冲。受调查的产品是原产于美国的取向电工钢。（注：取向电工钢是电力工业行业不可缺少的一种软磁材料，主要应用于各种类型变压器、整流器、电抗器等行业。）俄亥俄州的AK Steel Corporation 以及宾西法尼亚州的 ATI Allegheny Ludlum Corporation 被选为应诉企业。