Anti-Dumping and Countervailing Duties Double Remedy: The United States’ Pragmatic Approach to Chinese Currency Manipulation

Abstract

The United States has an alarming trade deficit with China. Many scholars and pundits attribute this trade deficit to China’s efforts to artificially undervalue its currency. While the legal regime of international trade emphasizes liberalized trade, certain protectionist measures are still allowed to combat unfair practices. Rather than addressing China’s currency manipulation directly, the United States has waged a pretextual battle by applying a double remedy of both anti-dumping duties and countervailing duties — both of which are legal under the WTO regime — on certain goods imported from China. Recent actions by the WTO Dispute Settlement Body and the U.S. Congress and Courts have reduced the sting of a double remedy by put in place requirements that a double remedy not double count the dumping margin, but the actual calculation allows a double remedy to remain potent. While not a direct attack, the inherent connection between monetary policy and international trade makes this pretextual double remedy attack a viable alternative to an all-out currency war or ineffective diplomatic efforts.