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Morris Manning & Martin, LLP

Commerce Affirms Duties Based On Currency Manipulation

05.25.2021

The U.S. Department of Commerce announced final tariff rates on imported car tires from four East Asian countries on Monday, including duties punishing Vietnam for suppressing the value of its currency, the dong.

Commerce tagged Vietnamese tires with a countervailing duty rate of 6.46%, waving away protests from the country's government, which argued that the U.S. had neither evidence of undervaluation in support of exports. Hanoi also argued that Commerce lacked the authority to investigate and countervail such programs under either U.S. or international trade law, including the World Trade Organization's Agreement on Subsidies and Countervailing Measures.

"Because our decisions here are consistent with the [Tariff Act of 1930] and our regulations, they are also consistent with our obligations under the SCM Agreement. The [government of Vietnam's] WTO-related arguments have no merit in this regard," Commerce said in its final issues and decisions memorandum.

Partner Brady Mills, counsel for the government of Vietnam, reiterated his client's position that the U.S. lacked the authority to treat currency undervaluation as a subsidy. In a statement to Law360 Monday, Brady highlighted "numerous failed legislative attempts to provide it with such authority," to support his argument, and stated that the "calculation of a precise rate of benefit from a so-called undervalued currency is arbitrary and capricious as there is no universally accepted methodology for quantifying how much a currency is undervalued on a bilateral basis." 

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