China Producers Receive Countervailable Duties

Regulation

Wednesday morning saw the Department of Commerce confirm an investigation request into possible countervailable duties received by Liaoning Zhongwang Group Ltd.  Lioyang Zhongwang Aluminum Profile Co. Ltd.  After a review, it was found that these producers and exporters of Aluminum extrusions, out of The People’s Republic of China did receive countervailable duties.

Explanation

A countervailable subsidy refers to when a subsidy,  to a foreign organization from it’s government; encourages an unfair competitive environment or injures an industry in the United States, where the subsidy can be offset by imposing a duty.  A coutnervailable subsidy has it’s own regulation that helps determine the amount of the subsidy.  “Countervailable” refers to the practice of establishing a duty, to offset the difference between the price of an import and a market price.

Just as the United States has agreed on the illegal nature of specific pricing strategies in it’s domestic market; countries may identify some pricing strategies to be illegal when trading internationally.  These pricing strategies are illegal when they start to damage domestic organizations or consumers.

We have seen determinations appear mostly surrounding dumping and countervailable subsidy claims.

Countervailable subsidy Determination follows this process

  1. A U.S. Industry determines that it is injured from unfair competitive advantages from an international organization due to excessive subsidy by the respective foreign government.
  2. This U.S. Industry files a petition to impose antidumping or countervailing duties with The Import Administration and United States International Trade Commission
  3. The Investigations proceed to prove or disprove the unfair trade practices are present
    1. If denial there are some other remedies to petition filers, but
    2. if approval the agencies determine the antidumping or countervailing duties in accordance with respective defining regulation.

This is the second article to cover the countervailing subsidy and dumping declarations, following the dumping claim of Insufflation tubing, last week from China, Taiwan, Korea, and India .

Disclaimer

Regulation Regular analyzes actions of government agencies with an explanation and examination for stratagem or opportunity.

In an effort to find opportunity for entrepreneurial and investment efforts, I have begun to monitor more actions from governmental agencies regarding regulations.  This segment aims to highlight interesting developments in the business environment including competitors, regulations, or interesting occurrences.

THIS IS NOT LEGAL ADVICE.  THIS IS COMMENTARY ON REGULATION.

Regulations can be a source of opportunity as they make a major part in the determination of barriers to entry.  An industry or practice is difficult to enter if there is a significant amount of regulative procedures and requirements, versus when restrictions are removed an opportunity may be present.  In this way we are doing our small part to encourage an informed people.

We start from modest beginnings but continue to identify, develop, and research opportunity and strategy for entrepreneurs, to better develop business ideas.

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