Leveling the Playing Field 2.0 Act would combat unfair Chinese business tactics that hurt domestic production and growth
WASHINGTON — U.S. Senator Tommy Tuberville (R-AL) today joined U.S. Senators Todd Young (R-IN) and Sherrod Brown (D-OH) to introduce bipartisan legislation that would protect American industry from Chinese efforts to get around American trade laws. The Eliminating Global Market Distortions to Protect American Jobs Act — also known as the Leveling the Playing Field 2.0 Act — would revise the U.S. antidumping (AD) and countervailing duty (CVD) laws to ensure international trade regulations and requirements do not unfairly favor international competitors, especially in the steel industry.
“China has been bending the rules and breaking the rules for decades,” said Senator Tuberville. “We have to fight back. Alabama’s steelworkers work hard, and as long as the playing field is level, they can outcompete anyone in the world. This bill is one step toward ensuring that the rules are enforced and China has to play fair.”
‘Dumping’ is a term used to describe the practice of exporting products at a price lower than the one charged domestically, or selling products at a lower cost to foreign customers. Antidumping agreements are used around the world to retain domestic production and jobs.
Countervailing duties (CVD) are fees charged by importing countries to counteract the benefit of subsidies provided to a producer by its home country. To equalize the market and promote free trade, international trading partners often reach CVD agreements to suspend subsidies and CVDs charged between the two nations.
Specifically, the Leveling the Playing Field 2.0 Act would protect American industries by revising U.S. antidumping and countervailing duty law to:
- Allow for new types of AD/CVD investigations to address “country hopping.”
- Give the Department of Commerce the authority to countervail cross-border subsidies and currency undervaluation.
- Impose asset requirements on non-resident importers, as well as new certification requirements for all importers.
- Reverse recent decisions from the U.S. Court of International Trade (CIT) with respect to cost-based particular market situations.
Senator Tuberville previously cosponsored the Leveling the Playing Field 2.0 Act in the 117th Congress.
BACKGROUND
In 2017, the Trump administration initiated 232 investigative proceedings after the Department of Commerce confirmed that the global excess of steel and aluminum has led to a negative impact on the U.S. economy. In response to this determination, the administration established a 24% tariff on all incoming steel. This tariff has led to a boom in U.S. domestic production of steel. Currently, the Biden administration is considering lifting tariffs, including 232 tariffs, arguing that the Trump-era tariffs have led to the rising inflation rate, and the European Union (EU) has requested 232 tariffs be lifted on EU exports to U.S. as part of a new trade deal.
To ensure that U.S. steel production remains successful, Leveling the Playing Field 2.0 Act would establish various forms of relief and strengthen consequences for violating AD/CVD laws.
The bill is aimed at specific changes to U.S. trade law that have arisen since the Trade Facilitation and Trade Enforcement Act of 2015 passed in the 114th Congress:
- Country Hopping to Escape U.S. Trade Remedies: After American steel producers won cases against cold-rolled steel from China in 2015 and 2016, for which the International Trade Commission (ITC) has extended duties just this month, China simply moved the finishing of the steel to Vietnam to evade the AD/CVD orders. Washing machine manufacturers saw a similar problem after they won a case against Korea in 2011, as production quickly move from Korea to China to escape those orders.
- Title I creates a new type of streamlined AD/CVD investigation, called a Successive Investigation, to facilitate a faster response to country hopping. Principally, the Successive Investigation would allow the petitioners to carry through fact patterns, avoiding the lengthy process to establish case elements like whether petitioners are broadly representative of the industry and materially injured by unfair imports.
- Belt and Road Initiative Subsidies: At present, the Department of Commerce can only consider subsidies provided by the government under investigation. But, with the expansion of the Belt and Road Initiative, China is beginning to subsidize production in countries outside of China.
- Section 201 would give Commerce the authority to apply CVD law to subsidies provided by a government to a company operating in a different country.
- Codifying Currency Manipulation Protections: While Commerce has established regulations to countervail currency and initiated on allegations filed in several cases, Commerce has been acting without any statutory authority for doing so.
- Section 401-402 would give Commerce the authority it is currently lacking to countervail currency. Dozens of other bills have been introduced to provide this authority, but none have ever passed.
- Strengthening Asset Requirements for Foreign Importers: Currently, non-resident importers are not required to maintain any U.S. assets, which complicates Customs and Border Protection’s (CBP) ability to collect duties.
- The bill requires that nonresident importers must have sufficient U.S.-based assets to cover their liabilities to CBP, as well as customs bonds in place to make the agency whole in the case of the importer’s default.
- Addressing Importers Who Manipulate Price: In some antidumping cases, the importer will take actions to manipulate Commerce’s dumping margin. For example, importers can make unrepresentative sales in small quantities to boost the normal value and reduce the likelihood their products will be found to be dumped.
- The bill also broadens the Commerce Department’s authority to use a “Particular Market Situation” to address subsidies in another country that are distorting the costs of production in the export country. For example, Commerce may determine there is a “particular market situation” if a Turkish pipe and tube sector is using subsidized Chinese steel slab to manufacture pipe and tube products that are dumped in the U.S. market.
Thanks to the state’s rich natural resources and abundance of mineral deposits, Alabama has a proud history as a metals manufacturing leader. According to the Alabama Department of Commerce, there are more than 1,100 metal manufacturing companies in the state, including national and global leaders in steel, pipelines, composites, and specialty metals. Those companies employ more than 35,000 Alabamians and export nearly $2 billion worth of metal manufactured goods per year. Today, Alabama is home to three of the top seven largest pipe manufacturing companies in the nation.
Senator Tommy Tuberville represents Alabama in the United States Senate and is a member of the Senate Armed Services, Agriculture, Veterans’ Affairs, and HELP Committees.
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