Senate approves bill allowing countervailing duties

The Senate on Monday afternoon quickly approved legislation that would give the Commerce Department the authority to continue imposing countervailing duties on imports from non-market economies such as China and Vietnam.

The upper chamber took the first step, approving the measure by unanimous consent, that would restore the agency's power to set tariffs, about $5 billion worth, on subsidized goods from nations without a domestic market, overturning a U.S. appeals court ruling in December.

The House is set to pass the bill on Tuesday under suspension of the rules. The legislation would then go to President Obama for his signature. 

"This is an extremely important piece of legislation we just adopted," said Senate Majority Leader Harry Reid (D-Nev.) on the floor. 

"It has had bipartisan support and we're able to do it quickly."

Senate Finance Committee Chairman Max Baucus (D-Mont.) and the panel's subcommittee on International Trade ranking member John Thune (R-S.D.) teamed up on the bill that reinstates the countervailing duties that had been in place since 2007.

They argue that the duties have protected an estimated 80,000 jobs across the country by holding non-market economies responsible for unfairly subsidizing billions of dollars of imports.

“By passing this bill, we’re backing American workers and businesses in the fight against China’s unfair trade practices,” Baucus said. “China doesn’t get a free pass to violate the rules at the expense of American jobs," he said. 

"We need to maintain these countervailing duties and strongly enforce our trade laws to level the playing field for U.S. businesses and workers.”

The bill is not without its detractors, with the Club for Growth urging lawmakers to oppose the legislation because it "makes it clear that Congress wants to escalate its trade war rhetoric with China." 

The plan doesn't fix the non-WTO-compliant " 'double counting' practice (it arguably makes it worse), and it harms U.S. importers and consumers by validating illegal, punitive duties that have already been collected," the group said. 

But the National Association of Manufacturers came out strongly in favor of the bill on Monday and questioned why any group would oppose it. 

The NAM welcomes the quick bipartisan, bicameral congressional work in tandem with the administration to fix a critical flaw in U.S. trade policy — the inability to defend against Chinese subsidized exports to the United States. Legislation is needed to correct a court’s finding that the Commerce Department currently lacks the authority to offset the harm done to U.S. manufacturers by these trade-distorting subsidies.  

"Failure to make it plain that the Commerce Department has this authority would leave manufacturers in the U.S. defenseless against rampant deep pocket Chinese and other government subsidies," said Frank Vargo, vice president of international economic affairs at NAM in a blog post. 

"Some groups have amazingly has come out against this legislation, saying it restricts economic liberty," he said. "Being concerned about economic liberty, they should have come out strongly in support of the bills because the legislation is about removing government distortion of trade."

Vargo said the law would apply equally to subsidies from non-market as well as market economies. 

The bill also provides for the Commerce Department to make a reduction to antidumping duties in non-market economy cases where countervailing duties are simultaneously being imposed, if it can be demonstrated that domestic subsidies have inflated the dumping margin, and if the Commerce Department is able to reasonably estimate an adjustment. 

House Ways and Means Chairman Dave Camp (R-Mich.), ranking member Sandy Levin (D-Mich.), subcommittee on Trade Chairman Kevin Brady (R-Texas) and ranking member Jim McDermott (D-Wash.) are leading the charge on the House side.

The bill was co-sponsored by 18 senators: Sherrod Brown (D-Ohio); Mitch McConnell (R-Ky.); Debbie Stabenow (D-Mich.); Tom Coburn (R-Okla.); Jay Rockefeller (D-W.Va.); Susan Collins (R-Maine); Bob Casey Jr. (D-Pa.); Rob Portman (R-Ohio); Tom Carper (D-Del.); Jeff Sessions (R-Ala.); Bill Nelson (D-Fla.); Pat Roberts (R-Kan.); Robert Menendez (D-N.J.); Lindsey Graham (R-S.C.); Kirstin Gillibrand (D-N.Y.); Carl Levin (D-Mich.), Jeff Merkley (D-Ore.); and Olympia Snowe (R-Maine).