House Bill Seeks CV Duty Law Change to 'Crack Down" on Currency Manipulators
A new House bill aims to stymie currency manipulation by changing current countervailing duty law by requiring the Commerce Department to use a broader set of facts to determine whether a subsidy benefits exporters. House Ways & Means Ranking Member Sandy Levin, D-Mich., is spearheading the legislation, called the Currency Reform for Fair Trade Act (here). “Currency manipulation by our trading partners has been going on for far too long, with American workers feeling the impact through lost jobs and lower wages,” Levin said at a press conference announcing the bill. “This bill includes measures to provide the Administration with the additional tools necessary to enforce the rules of global trade and is consistent with our [World Trade Organization] obligations. It also helps strengthen the Administration’s efforts to develop a multilateral framework for addressing this global competitiveness issue.”
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More than 100 Republicans and Democrats have signed onto the bill, which mirrors one introduced in the last session of Congress. Under current U.S. law, countervailing duties can be imposed on imports benefiting from foreign government subsidies for export, but only if those imports injure a U.S. industry producing similar products. Commerce has so far declined to investigate any foreign government’s currency practices as a countervailable subsidy, according to a statement from Levin’s office.
The bill requires Commerce to end its practice of finding export subsidies only if the subsidy is limited to the circumstances of export. The bill “precludes Commerce from imposing this bright-line rule and, instead, requires Commerce to consider all the facts in making its determination of export contingency,” said a statement from Levin’s office. It also expands how Commerce assesses whether a benefit exists when government intervention sparks material currency undervaluation. The bill directs Commerce to assess this benefit in terms of additional currency the exporter receives thanks to the undervaluation. The bill requires Commerce to use data from the International Monetary Fund, national governments and international organizations to determine the level of undervaluation.