CPA Praises First-Ever Commerce Department Decision on Currency Manipulation

November 05, 2020

Countervailing duties will address Vietnam’s subsidies and currency practices

Washington. The Coalition for a Prosperous America (CPA) praised a Commerce Department decision announcing preliminary countervailing duties (CVDs) on tire imports from Vietnam. The Commerce Department determined that tire producers in Vietnam received unfair subsidies due to the country’s deliberately undervalued currency. This is the first time an affirmative countervailing duty determination has been issued in response to a country’s currency practices.

“We thank Secretary Ross and his agency for going after currency manipulation for the first time in the history of the Commerce Department,” said CPA Chair Dan DiMicco. “U.S. manufacturers are continually under assault from heavily subsidized import competition. But globalists have long fought against classifying currency manipulation as a subsidy. We hope to see more relief granted in the future when U.S. manufacturers face such predatory currency challenges.”

Last May, the United Steelworkers filed antidumping and CVD petitions with Commerce and the International Trade Commission regarding deliberate currency undervaluation affecting imports of passenger vehicle and light truck tires from Vietnam, South Korea, Taiwan, and Thailand. In June, the Commerce Department responded by initiating an investigation into these allegations. It’s estimated that passenger tire imports from Vietnam alone reached roughly $470 million in the U.S. last year. 

Yesterday, the Commerce Department announced a preliminary determination that tire producers in Vietnam benefited from subsidies ranging from 6.23 percent to 10.08 percent. This marks the first time that Commerce has granted CVD relief due to a foreign currency’s exchange rate.

“Commerce’s decision marks an important turning point in U.S. trade law,” said Michael Stumo, CEO of the CPA. “We appreciate the work of the United Steelworkers in filing this landmark petition. And we also support the separate probe launched by Trade Ambassador Robert Lighthizer and his team regarding Vietnam’s currency practices under Section 301 of U.S. trade law. Since the World Trade Organization and the International Monetary Fund have refused to tackle this serious problem, the U.S. government must use domestic law to protect America’s producers from foreign predation.”

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