The Commerce Department’s first self-initiations of antidumping and countervailing duty investigations in more than a quarter century have signaled to potential petitioners for AD/CV duty relief that the Trump administration is taking a staunch approach to trade enforcement, observers said recently.
Commerce on Nov. 28 announced the self-initiation of AD and CV duty investigations of imports of common alloy aluminum sheet from China.
According to a July 24 Commerce press release, the department at that point had started 120 new AD and CV duty investigations under the Trump administration, 216 percent more than the 38 initiations started throughout the first 539 days of the Obama administration, a similar time window.
“Petitioners’ counsels and law firms are busier than ever,” said Tom Sneeringer, who retired June 30 from his position as president of the Committee to Support U.S. Trade Laws. “And I think what’s happening is it’s feeding on itself in the sense that, as more and more remedies are won, people who have wondered if they could get a remedy are calling lawyers and saying, ‘Let me tell you what my situation is,’ because there is a new confidence in winning these cases.”
Although the administration could be signaling a tougher stance on enforcement, the recent influx in cases also could be related to several new statutes cracking down on unfair trade, including the June 2015-enacted Leveling the Playing Field Act, which gives Commerce the ability set higher dumping margins based on “facts available” in cases in which respondents don’t cooperate, Sneeringer said.
Another relevant statutory package is the Enforce and Protect Act (EAPA) provisions in the Trade Facilitation and Trade Enforcement Act (TFTEA), signed into law in February 2016, he said. That language sets forth a process for U.S. Customs and Border Protection (CBP) to investigate allegations of AD and CV duty evasion.
Moreover, China’s steel overcapacity can contribute to an increase in cases, as several times there is a first case against China and then several follow-up cases against other countries, Wiley Rein trade attorney Tim Brightbill said.
The United States’ strong, large and open economy incentivizes countries to offload their excess capacity here, resulting in an increase in recent cases, said Brightbill, who agreed with Sneeringer that EAPA and the use of “facts available” could be driving more AD/CV petitions.
While the biggest decision in bringing a petition still has more to do with winning injury cases at the International Trade Commission — where it is traditionally more difficult than Commerce to win — the Trump administration appears to be giving a broad message that it is “open for business” in the AD/CV realm, said BakerHostetler AD/CV duty attorney Mark Lehnardt, who generally represents respondents in AD/CV duty cases.
“When the agency that conducts the investigation signals that whatever you do, they’re going to be helping you out, then it initiates borderline cases into action,” he said, noting the administration’s decision to self-initiate the aluminum investigation. “The injury question is really the gateway.”
Even considering recent trends, petitioners still need to bring strong cases to receive remedy relief, “because you’ve got to win at both agencies,” Brightbill said. “So there are more cases being filed, but you have to — domestic companies and industries have to prove their case just as thoroughly as ever before.”
Another indicator of the Trump administration’s intense focus on trade enforcement is the executive branch’s recent budgets, Sneeringer said.
Compared with fiscal year 2018 provided appropriations, Commerce’s FY 2019 budget calls for an additional 21 positions and an additional $3.6 million to self-initiate AD/CV duty cases, as well as an additional seven positions and an additional $1.2 million for “enhanced trade enforcement and analysis” in the Enforcement and Compliance (E&C) division of Commerce’s International Trade Administration, which conducts AD/CV duty enforcement.
President Donald Trump’s nominee to lead E&C, Jeffrey Kessler, has displayed his favorability toward AD/CV duty investigation self-initiations, saying during his June Senate confirmation hearing that he would seriously consider such actions if confirmed, especially cases that would protect U.S. industries with a lot of small companies and that would mitigate potential retaliation against U.S. industries in connection with their petitioning.
The Senate Finance Committee cleared Kessler’s nomination on June 28. Kessler now awaits a confirmation vote on the Senate floor.
Sneeringer said that recent ITC commissioner nominations could result in a continuing environment in which petitioners get a “fair shake,” as Trump’s nominees “meet his test for trade enforcement.” Some of these nominees will survive Trump’s second term, if he is re-elected, Sneeringer said.
The Senate confirmed Jason Kearns on March 1 to be a commissioner through Dec. 16, 2024; the Senate Finance Committee held a confirmation hearing June 12 for the nomination of Randolph Stayin to be a commissioner through June 16, 2026, and Amy Karpel to be a commissioner through June 16, 2020; while Dennis Devaney was nominated on Oct. 2, to serve on the ITC through June 16, 2023, and still awaits a confirmation hearing.
“Right now, there’s a very comfortable feel that if you’ve got the facts, if you’re prepared to prove unfair trade and injury, that you expect to win,” Sneeringer said. “Before, it was a little less certain, especially at the ITC.”