WASHINGTON – Congress on Tuesday overturned a court decision and reaffirmed that the government has the right to impose higher tariffs on goods from China and other state-run economies that subsidize their exports to the United States.
The House voted 370-39 to pass the measure and send it to President Barack Obama for his signature. The Senate approved it Monday on a voice vote with no debate.
“By passing this law, Congress has taken a clear stand against the unfair trade practices that have put countless American jobs in jeopardy,” Vice President Joe Biden said in a statement.
In Beijing today, China criticized the votes in Congress. Commerce Minister Chen Deming said China follows rules laid down by the World Trade Organization, but does not have to abide by the laws of other countries.
The speedy and bipartisan congressional action came after a federal appellate court ruled in December that the Commerce Department did not have the authority to levy the punitive tariffs because Congress had never explicitly given the agency that right.
The Commerce Department has been applying these “countervailing” duties since 2007. The legislation ensures that 24 existing higher tariff orders and six pending investigations against imports from China and Vietnam will continue to be valid. Of those 24, 23 are directed at Chinese subsidies.
The duties are allowed under World Trade Organization rules to counteract unfair subsidies used by countries, such as China and Vietnam, with non-market economies. China agreed to abide by countervailing duty laws when it joined the WTO in 2001.
“China distorts the free market by giving enormous subsidies to its producers and exporters,” said House Ways and Means Committee chairman Dave Camp, R-Mich.
Senate Finance Committee Chairman Max Baucus, D-Mont., said that since 2007 countervailing duties have protected some 80,000 jobs across the country. “China doesn’t get a free pass to violate the rules at the expense of American jobs,” he said.
U.S. Trade Representative Ron Kirk, at a House hearing last week, urged Congress to act quickly to overturn the “flawed decision.” He said that “prompt legislative action would clarify the law and avoid harm from injurious, subsidized goods.”