Recently, the United States completed an extensive review of the Chinese wire decking industry, vindicating Chinese industry claims that sales of Chinese wire decks have not injured or threatened with injury the U.S. wire decking industry.
Countervailable Subsidies – Comments have been made that the Chinese government is heavily supporting Chinese industry. In the final U.S. Commerce Department investigation, the Department examined dozens of alleged programs, but the two largest exporters were found to have benefited from countervailable subsidies of only approximately 3% each. This amount was derived mainly from a single countervailable program—the provision of steel inputs at “less than adequate remuneration” by state steel companies. When considering that Commerce regulations require it to add some 5% for import fees, more for delivery fees upon import, and 17% VAT to an “international benchmark” when measuring the subsidy and, given the built-in bias in the comparison prices (fully delivered imported benchmark versus ex factory domestic Chinese prices), the 3% countervailing duty margins were remarkably low. Indeed, these margins are relatively inconsequential and comparable to advantages a U.S. company may earn from negotiating with its local, state or federal governments for various grants. We note that U.S. industry did not appeal the Department’s final countervailing duty margins. — Gregory S. Menegaz, deKieffer & Horgan, Counsel to Eastfound Cos. & Worldwide MH
(Editor’s Note: For the full text of this letter, please go to www.TheMhedaJournal.org. This letter is a response to a Letter to the Editor published in the April 2010 issue of The MHEDA Journal by the counsel for the petitioners. As of press time, this case is still in the appeals process. The opinions expressed here are the writer’s and do not necessarily represent those of MHEDA.)