By  on March 14, 2005

WASHINGTON — A bill that would target imports from China and other nonmarket economies that produce goods with the help of government subsidies was reintroduced Thursday in the House and Senate.

Supporters of the Stopping Overseas Subsidies Act said it is a nonpartisan effort to combat China’s mounting incursion in the U.S. market in apparel, textiles, furniture, metals and machinery. The bill has broad support among Republican and Democratic lawmakers who said Congress and the Bush administration haven’t been aggressive enough in fighting unfair trade practices in the face of U.S. manufacturing declines.

“Now that China has the capacity to be a key international economic player, the country has repeatedly refused to comply with standard international trading rules and practices,” Sen. Susan Collins (R., Maine), a lead sponsor with Sen. Evan Bayh (D., Ind.), said Thursday on the Senate floor.

In addition to nonmarket loans to manufacturers, Collins said China’s artificial depression of the value of its currency was “the most glaring subsidy.” China is considered a nonmarket economy because of its state-owned enterprises, banking system and central control.

The measure would direct the Commerce Department to permit U.S. industries to file antifair trade complaints against nonmarket economies, alleging that import prices are being held down because of foreign government manufacturing subsidies, resulting in harm to U.S. producers. A 1979 law permitting so-called countervailing duty cases to be filed has been interpreted by the agency to cover only market economies.

Countervailing duties are punitive tariffs of varying amounts that are levied on a case-by-case basis if Commerce and the International Trade Commission find a foreign manufacturer has been subsidizing its exports to the detriment of U.S. producers.

Tamara Browne, a lobbyist for an industry coalition pressing for countervailing duties for nonmarket economies, said the outlook is good for the SOS Act to gain traction this Congress. Browne said the bill could be more easily embraced by GOP leadership in the House and Senate, and by President Bush, than a more sweeping measure introduced by Sens. Lindsey Graham (R., S.C.) and Charles Schumer (D., N.Y.), that calls for imposing 27.5 percent tariffs on all Chinese imports until the country stops depressing the value of its currencies.The administration has refused to directly intercede on the currency issue and instead has sought to prod the Chinese into change. Bush continues to face criticism within his own party for not being more aggressive on China.

“The growing trade deficit between the U.S. and China has escalated to a historic high, resulting in losses of [U.S.] jobs and for many a way of life,” Rep. Phil English (R., Pa.), an SOS Act sponsor, said in a statement.

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