US prevails in China trade case; WTO ruling could impact steel

Dec 14, 2010 | 12:59 PM |

The World Trade Organization (WTO) dispute settlement panel found in favor of the United States in a complaint brought by China challenging President Obama's decision to impose Section 421 tariffs on imports of Chinese tires.

While the case centers on tires, steel industry sources said it has significant implications for steel and other trade with China.

"The WTO essentially validated the U.S. Section 421 law, and the definitions of surge, market disruption and injury as applied in the tire example should be easily transferable to the steel industry," said John Tumazos, analyst with Very Independent Research LLC, Holmdel, N.J.

Section 421, intended to halt import surges that disrupt the U.S. market, is enforced at the President's discretion based on recommendations by the U.S. International Trade Commission and the U.S. Trade Representative's office.

The White House issued a decision a year ago to impose Section 421 tariffs on imports of Chinese tires (AMM, Sept. 15, 2009). China challenged the import duties on passenger and light truck tires under the Section 421 safeguard mechanism included in China's Protocol of Accession to the WTO.....