The Changing Nature of Import Relief

01/09/2018

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William Reinsch

I normally don’t comment on specific trade cases that are pending, largely because they are advocacy driven, and saying anything inevitably produces cranky comments from people on the other side explaining in excruciating detail why I don’t know what I’m talking about. Way too much aggravation. However, the two Section 201 cases that the president will shortly decide—solar panels and washing machines—are good illustrations of how much the trade landscape has changed in recent years and how unexpectedly complicated these decisions have become.
For those who have forgotten (or never knew in the first place), Section 201 of the Trade Act of 1974 authorizes “safeguard” measures, which are permitted under limited circumstances by the World Trade Organization (WTO). To get relief, one need not prove dumping or subsidization or any other unfair practice. You simply need to establish that a fairly rapid increase in imports is causing serious injury (a higher threshold than the “material” injury in antidumping/countervailing duties cases). The safeguard concept permits temporary import relief in such cases, usually defined as no more than four years, with the expectation that any relief granted will decline in each succeeding year. To win, the International Trade Commission (ITC) must decide that serious injury has occurred by reason of the imports and recommend a remedy, but final action is up to the president, who has broad discretion.

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