Can the US apply CVDs to imports from China?

The answer seems obvious, because the US does apply CVDs to Chinese goods, but here’s what Scott Lincicome calls a “bombshell“:

the US Court of Appeals for the Federal Circuit (CAFC) affirmed a decision from the lower US Court of International Trade (CIT) that the Commerce Department’s current method of applying countervailing and anti-dumping duties on imports from China and other “non-market economies” (NMEs) like Vietnam was invalid because it led to “double counting.” I’ve previously commented on the CIT decision – GPX Int’l Tire Corp. v. United States – and it was a pretty big deal. But it was somewhat limited because it applied to only Commerce’s methodology for applying anti-dumping and countervailing duties simultaneously on the same NME-origin product.

The CAFC, on the other hand, went a whole lot further than the CIT, finding that, under current US law, “government payments cannot be characterized as ‘subsidies’ in a non-market economy context, and thus that countervailing duty law does not apply to NME countries.” So instead of ruling on the discrete “double counting” issue, the CAFC essentially said that the entire CVD law doesn’t apply to Chinese and other NME imports.

That’s an even bigger deal.

His long post has details.