Anti-Subsidy Law Applies to China



Letter to the editor of The Wall Street Journal

January 11, 2012

The Journal praises a federal court for invalidating the use of the U.S. anti-subsidy law against subsidized imports from non-market economies like China ("The Name of the Trade Game," Review & Outlook, Dec. 21  - Paid Subscriber Content - ), but ignores flaws in the court's ruling and the devastating impact that this decision will have on U.S. manufacturers.

The court's decision was based on an erroneous conclusion, namely that Congress had silently ratified the view that anti-subsidy law cannot be applied to China—based on prior agency practice with regard to Soviet-style nonmarket economies. Nothing could be further from the truth. Indeed, both Houses of Congress have recently passed legislation premised on the view that the anti-subsidy law does apply to China, just as both the Bush and Obama administrations have concluded.

The Journal also avoids dealing with the reality that this decision, if not overturned, will be extremely damaging to U.S. manufacturers, who face an onslaught of heavily-subsidized Chinese goods. These unfair imports have contributed significantly to our country's massive trade deficit with China, now on pace to exceed $294 billion this year, and to the loss of literally millions of U.S. jobs.

The court's decision is, plain and simple, a victory for nonmarket behavior and an open invitation for China to keep intervening in the market, which seems like an odd thing for the Journal to celebrate.

Thomas J. Gibson
President and Chief Executive Officer
American Iron and Steel Institute