Today, under the leadership of President Donald J. Trump, the U.S. Department of Commerce announced that it has published a final regulation for imposing countervailing duties on products that benefit from unfair currency subsidies which, in turn, cause harm to domestic industries.

“This Currency Rule is an important step in ensuring that unfair trade practices are properly remedied,” said Secretary of Commerce Wilbur Ross. “While successive administrations have balked at countervailing foreign currency subsidies, the Trump Administration is taking action to level the playing field for American businesses and workers.”

U.S. law defines a countervailable subsidy as a financial contribution from a government or public entity that is specific and that provides a benefit to a foreign producer or exporter.  The final regulation identifies the criteria the Department would use to determine if countervailing duties should be imposed for subsidies  in the form of currency undervaluation that results from government action on the exchange rate during the relevant period.  In assessing whether there has been such government action, Commerce will not normally include monetary and related credit policy of an independent central bank or monetary authority.  Commerce will seek and generally defer to Treasury’s expertise in currency matters.

In May 2019, Commerce published a proposed version of this currency regulation. After its publication, the Department received dozens of public comments that helped to inform the final rule regarding the issue of subsidies resulting from currency undervaluation. 

Since the beginning of President Trump’s term in office, the strict enforcement of U.S. trade law has been a critical focus of his Administration. At the Department, 198 new antidumping and countervailing duty investigations have been initiated – a 168 percent increase from the comparable period in the previous administration.

In total, Commerce currently maintains 516 antidumping and countervailing duty orders, which provide relief to American companies and industries impacted by unfair trade. 

The Enforcement and Compliance unit within the International Trade Administration of the Department of Commerce is responsible for countervailing duty proceedings and determinations. Along with antidumping duty laws, countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of unfairly traded imports into the United States.