Opponents, including Mexico’s government, argued that countervailing transnational subsidies could violate the WTO Agreement on Subsidies and Countervailing Duties. However, Commerce dismissed such claims, asserting that the Tariff Act of 1930 doesn’t preclude transnational duty probes.
Commerce’s Justification
In its final ruling, Commerce defended its decision, emphasizing that restrictions on countervailing subsidies were inconsistent with the essence of the Countervailing Duty (CVD) law. Moreover, the agency clarified that the act does not mandate a restrictive interpretation, thereby solidifying its stance on the matter.
Embracing Economic Realities
Furthermore, the regulations extend beyond subsidies to address distortions in particular market situations, aligning with a precedent-setting 2022 Federal Circuit decision. Commerce contends that lax environmental, labor, and intellectual property protections contribute to unfair advantages enjoyed by foreign producers, necessitating regulatory intervention.
Commerce Lifts Block On Transnational Subsidy Probes : Future Prospects
Commerce officials hinted at more regulatory changes on the horizon, slated for release this summer. These changes aim to refine separate-rate designations, aimed at curbing the influence of government-owned producers in nonmarket economies like China.
