US readies rule to impose duties on products of countries that undervalue currencies

WASHINGTON: The US Commerce Department on Monday finalised a new rule to impose anti-subsidy duties on products from countries that it has determined undervalue their currencies against the dollar, including potentially China.

The move could provide a fresh irritant in US-China trade talks just weeks after the world’s two largest economies signed a Phase 1 trade agreement, and comes a day after Beijing accused Washington of spreading fear about the fastspreading coronavirus that originated in China.

In theory, the new rule would allow the Commerce Department to impose duties on China, even though the US Treasury Department recently removed its designation of China as a currency manipulator as part of the Phase 1 trade deal.

Commerce said it would generally rely on the Treasury’s expertise in determining undervaluation, but the two processes could come to different conclusions since they resulted from different statutes. The draft rule was first published in May.

It said it would only impose countervailing duties on imports of specific products that both benefit from countervailable subsidies and are found by the US International Trade Commission to injure US industries.

The rule would not result in the application of such duties to all imports from a given country, because not all such imports injure US industries, it said.

In addition to China, the new rule also could put goods from other countries at risk of higher tariffs, including Germany, Ireland, Italy, Japan, Malaysia, Singapore, South Korea, Vietnam and Switzerland.

Those countries were all on the “monitoring list” included in the Treasury Department’s semi-annual currency report, which tracks curren-cy market interventions, high global current account surpluses and high bilateral trade surpluses. – Reuters