China Welcomes U.S. Court's Final Ruling on Dual Duties on Chinese-Made Tires

China has welcomed the final ruling by the U.S. Court of International Trade (CIT) directing the U.S. Department of Commerce (DOC) to scrap its imposition of countervailing duties (CVD) on tires from a Chinese manufacturer, China's Ministry of Commerce (MOC) said.

The U.S. court ruling on Oct. 1, together with its two previous rulings, showed that the DOC's simultaneous imposition of CVD and anti-dumping duties (AD) based on the Non-Market Economy (NME) methodology on China's Hebei Starbright Tyre Co., Ltd was unlawful, according to a statement provided by the MOC's Bureau of Fair Trade for Imports and Exports.

The U.S. Commerce Department was also urged to correct its behavior on this issue, the statement added.

China had always maintained that the double use of these punitive duty measures infringed on U.S. rules of not adopting anti-subsidy measures against non-market economies, said an official from the bureau, who declined to be named.

It also went against the World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures and harmed the interests of Chinese enterprises, said the official.

The U.S. Commerce Department has yet to respond. The court gave the DOC 60 days to decide on an appeal in the Court of Appeals. China will use the ruling to encourage domestic enterprises to use legal means to protect their legitimate rights and interests, the statement said.

The U.S. Commerce Department decided on July 31, 2007, that it would launch AD and CVD probes simultaneously into China-made off-road tires.Further, it announced on Sept 4, 2008, that it would levy duties of 19.15 percent and another duty ranging from 2.45 percent to 14 percent on Chinese tires.

In 2008, China's Hebei Starbright Tyre Co., Ltd sued the U.S. Commerce Department in the CIT.

The CIT ruled on Sept. 18, 2009, that the duties imposed by the U.S. Commerce Department on Hebei Starbright Tyre Co. Ltd. could cause double counting since "while Commerce may have the authority to apply the CVD law to products from a non-market economy (NME)-designated country, the CVD and NME AD statutes are unclear as to how Commerce is to account for the overlap between the statutes when imposing both CVD and AD duties on goods from a NME country."

In response to the DOC's appeal, the U.S. court made its ruling on Aug. 4, 2010, for the second time, which says that the U.S. DOC did not abide by the CIT's ruling in 2009 and needed to halt the imposition of the anti-subsidy measures on China.