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US House passes China subsidy bill, sends to Obama

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Reuters Washington

The US House of Representatives on Tuesday voted 370-39 to ensure the United States can impose duties on subsidised goods from China and Vietnam, overwhelmingly rejecting a last-ditch attempt by a conservative group to portray it as a tax hike.

The bill, which overturns a recent court ruling, now goes to President Barack Obama, who is expected to sign it into law. The Senate passed the legislation on Monday.

"China distorts the free market by giving enormous subsidies to its producers and exporters, and our companies and workers should not be expected to compete against the deep pockets of the Chinese government," House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said during debate.

 

The Obama administration helped craft the bipartisan bill after an appeals court ruled in December the US Commerce Department did not have authority to impose countervailing - or anti-subsidy - duties on goods from "non-market economies".

The decision endangered countervailing duties on about two dozen goods from China and Vietnam worth more than $4 billion in trade, as well as potential new duties in cases involving solar panels and wind turbine towers from China.

Supporters says current duties protect some 80,000 American jobs. They cover steel, aluminum, paper, chemicals and other products from China and plastic shopping bags from Vietnam.

"With this bill, we are making clear that the Federal Circuit's decision was wrong and it cannot stand," said Representative Sander Levin, the top Democrat on the House Ways and Means Committee.

The bill steers clear of the more politically divisive issue of China's currency, which many lawmakers believe Beijing deliberately undervalues to give its companies an unfair price advantage in international trade.

The Democratic-controlled Senate passed legislation last year to pressure Beijing on the issue, but the Republican-dominated House has refused to take up the measure on the grounds it could start a trade war.

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First Published: Mar 07 2012 | 10:19 AM IST

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