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The Journal Gazette

  • Bloomberg U.S. trade lawsuits have targeted foreign companies, including steel companies in India, where a container is unloaded.

Sunday, December 31, 2017 1:00 am

Trade battles heating up

More US companies suing foreign rivals for competitive relief

Aaron Gregg | Washington Post

U.S. companies are bringing new trade lawsuits against their foreign competitors with a scope and frequency not seen in more than 15 years, government documents show, as a wave of new complaints builds under President Donald Trump.

A Washington Post analysis of Commerce Department data found 23 new trade disputes that have been initiated since January, making 2017 the busiest year for tariff cases since 2001.

The new cases target trade between the United States and 29 counties, the most in any year since 2001.

The cases include fights over Korean washing machines, Spanish olives, Chinese aluminum foil, Vietnamese tool chests, Argentine biodiesel and Canadian jetliners. The U.S. trade warriors include financially strapped solar panel manufacturers, downsizing Rust Belt steel plants and declining California olive farms.

Several requests came from companies that are under foreign ownership. And in a shift from previous years, some profitable corporations are asking the government to place new restrictions on their foreign rivals, taking advantage of a recent change in federal law.

The surge of complaints comes as the White House moves to redefine America's role in the global economy.

“At President Trump's direction, we have told American businesses that we will be more enforcement-minded than any recent administration, while also remaining committed to a fair and transparent process that is professionally and impartially implemented,” Commerce Secretary Wilbur Ross said in an emailed statement.

“They know we will stand with American workers in the face of unfair trade practices.”

Tariff cases typically start when U.S. companies formally accuse foreign competitors of “dumping” products in the United States at unfairly low prices, or deriving benefit from unfair subsidies, or both.

Then the Commerce Department and a quasi-judicial U.S. agency called the International Trade Commission decide what to do.

Ross has said he wants the government to bring more cases on its own, something that could let companies save on legal expenses. The Commerce Department took its first step in that direction in a November tariff action against sheet metal distributors in China, the first government-initiated action since 1985.

The Washington Post's count of 23 new disputes in 2017 is based on the number of petitioners that are calling for new tariffs. (If, for example, a single U.S. company asks for tariffs on products from 10 countries, the Post treated it as a single new dispute, even though such an action would spur 10 Commerce Department investigations.)

When calculated based on the number of new investigations – as the Commerce Department tends to represent the trend in its news releases – there were 79 new investigations in 2017, reflecting a massive 65 percent jump over the previous year and a 16-year high.

Since most of the new trade cases are just beginning to work their way through the government's deliberative process, it is too early to tell whether they will ultimately succeed.

Some companies are pushing for price quotas, which forbid foreign firms from selling below a given price.

And in two cases this year, three companies have invoked a powerful and seldom-used U.S. trade lever called the “safeguard” provision, which imposes blanket taxes on products regardless of the country of origin.

Such cases are unique in that they require a direct sign-off from the president; before Trump took office, no company had asked to be safeguarded in this way since 2001.

“The fact that we have already seen two of these cases in 2017 should be a clear signal that corporate America thinks the Trump administration is going to grant it protection,” said Chad Bown, a fellow at the Peterson Institute for International Economics, a research and policy organization focused on global trade.

The Trump administration is preparing to rule on both cases early next year.

The U.S. companies seeking tougher import duties argue that trade restrictions are needed to level the economic playing field and sustain American jobs, and have little to do with politics or Trump.