WASHINGTON (Dec. 22, 2011) — The defendants in the recently overturned Chinese OTR tire imports countervailing duties case—Titan Tire Corp., the United Steelworkers and Bridgestone Americas Inc.—have up to 90 days to decide whether to appeal the 3-year-old case again, according to attorneys for the plaintiffs.
The case—GPX International Tire Corp./Hebei Starbright Tire Co. Ltd. and Tianjin United Tire & Rubber International Co. Ltd. (TUTRIC) vs. the U.S., Titan Tire, the USW and Bridgestone—was filed originally in December 2008 in reaction to stiff import and countervailing duties filed earlier that year by the U.S. Commerce Department against a number of Chinese OTR tire makers.
The U.S. Court of Appeals for the Federal Circuit in Washington ruled Dec. 19 that the Commerce Department did not have the authority in 2008 to impose countervailing duties on certain OTR tires from China. The ruling by a three-judge panel affirms a position taken by the U.S. Court of International Trade in September 2009 and reconfirmed in August 2010 that countervailing duties cannot be applied to goods from non-market economy (NME) countries.
Titan said the pressure now is on Congress to implement changes in the law. “Titan does not feel that while waiting for Congress to act, we will be losing out on any significant amount of sales,” Maurice Taylor Jr., Titan chairman and CEO, said in a prepared statement.
In the ruling, the court found that the U.S. Congress, in amending and re-enacting international trade laws in 1988 and 1994, adopted the position that countervailing duty law does not apply to NME nations and therefore only Congress can remedy any inadequacies in trade law that don't protect U.S. industry from perceived unfair competition.
Saying the “court's decision undermines the integrity of our trade laws and the ability to address Chinese unfair and predatory trade practices,” USW International President Leo Gerard pledged to work with the Obama Administration and urged Congress to take action.
“The court dropped a lump of coal into the stocking of every worker who is working hard, playing by the rules and just hoping for a fair chance to compete against China's manufacturing and export juggernaut.” Gerard said. “The sounds of applause coming from Tiananmen Square greeted the court's decision to legalize its cheating.”
Gerard went on to say that China's trade practices, according to Economic Policy Institute data, have affected 2.8 million jobs in the U.S. since China joined the World Trade Organization in 2001.
“The USW has been forced to file numerous trade cases to combat China's unfair trade practices in the fight for our member's jobs,” Gerard said. “That's a fight we don't plan on giving up.”
According to attorneys for plaintiffs GPX/Hebei Starbright, the defendants in the case, including the Commerce Department, can appeal the case, either to the Appeals Court's full judge panel or to the Supreme Court.
If neither occurs, the Appeals Court's ruling becomes de facto law, an occurrence that would impact a growing number of other cases affecting dozens of companies in a number of industries, according to Daniel L. Porter of Winston & Strawn L.L.P., the Washington law firm representing GPX/Hebei Starbright.
Once the case is resolved, the appellants will be able to apply for the return of countervailing duty deposits, Porter said.
Since GPX no longer exists—it filed for bankruptcy in late 2009 and its assets were liquidated—Winston & Strawn is continuing the case primarily for Hebei Starbright, now owned by Maine Industrial Tire L.L.C.
The other appellant, TUTRIC, is represented by separate counsel, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt L.L.P., of Washington. Attorneys for TUTRIC have not yet responded to requests for comment.
The U.S. Commerce Department, acting on a petition by Titan and the USW, concluded in mid-2008 that exporters of Chinese OTR tires had received subsidies from the government there at rates ranging up to 14 percent of the value.
The Commerce Department estimated the value of imports of Chinese OTR tires in 2007 was $360 million.