The U.S. Department of Commerce has made a groundbreaking decision, erasing a nearly four-decade-old regulation to wield countervailing duties on subsidies China offers its trade allies. Despite foreign resistance citing potential conflicts with World Trade Organization (WTO) obligations, this move signals a seismic shift in international trade dynamics.
Commerce Lifts Block On Transnational Subsidy Probes : Unveiling the New Rule
In a bold move, the final rule enables Commerce to delve into allegations of transnational subsidies, reversing a previous restriction that confined countervailing duty investigations to domestic government subsidies within the country of production. With details on the implementation yet to be disclosed, this expansion of authority marks a significant departure from traditional practices.
During a press call, Commerce officials, speaking under anonymity, disclosed that the revision concerning transnational subsidies was a direct response to China’s ambitious Belt and Road Initiative. This initiative, which has seen Beijing invest approximately $1 trillion in global infrastructure and development projects since 2013, prompted a reevaluation of existing regulations.
International Reactions
Upon the rule’s proposal in May, it sparked a flurry of responses, with over 50 comments flooding in from various trade groups and government bodies, including Canada, China, Korea, and Vietnam. While receiving backing from U.S. stakeholders, foreign commentators expressed concerns over its potential to disrupt trade and its perceived legality.
