Order Code RL32371
CRS Report for Congress
Received through the CRS Web
Trade Remedies: A Primer
Updated May 2, 2005
Vivian C. Jones
Analyst in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Trade Remedies: A Primer
Summary
The United States and many of its trading partners use laws known as trade
remedies to mitigate the adverse impact of various trade practices on domestic
industries and workers. These laws are consistent with U.S. international obligations
if they conform to the World Trade Organization (WTO) Antidumping, Subsidies,
and Safeguards Agreements and to other trade agreements to which the United States
is a party.
U.S. antidumping laws (19 U.S.C. 1673 et seq.) authorize the imposition of
duties if (1) the International Trade Administration (ITA) of the Department of
Commerce determines that foreign merchandise is being, or likely to be sold in the
United States at less than fair value, and (2) the U.S. International Trade Commission
(ITC) determines that an industry in the United States is materially injured or
threatened with material injury, or that the establishment of an industry is materially
retarded, due to imports of that merchandise. A similar statute (19 U.S.C. 1671 et
seq.) authorizes the imposition of countervailing duties if the ITA finds that the
government of a country or any public entity has provided a subsidy on the
manufacture, production, or export of the merchandise, and the ITC determines
injury. U.S. safeguard laws (19 U.S.C. 2251 et seq.) authorize the President to
provide import relief from injurious surges of imports resulting from fairly
competitive trade from all countries. Other safeguard laws authorize relief for import
surges from communist countries (19 U.S.C. 2436) and from China (19 U.S.C.
2451). In each case, the ITC conducts an investigation, forwards recommendations
to the President, and the President may act on the recommendation, modify it, or do
nothing.
WTO dispute resolution panels and Appellate Body rulings have found that the
United States is in violation of its WTO obligations with regard to two U.S. trade
remedy laws — the Continued Dumping and Subsidy Offset (CDSOA, also known
as the Byrd Amendment) and the Antidumping Act of 1916. The Antidumping Act
of 1916 was repealed in the Miscellaneous Trade and Technical Corrections Act of
2004 (P.L. 108-429). Some Members of Congress, however, have expressed
disapproval for any provision that would weaken U.S. trade remedy laws. In fact, an
assurance that the United States would retain the ability to “rigorously enforce its
trade laws” was included as a trade negotiating objective in the provision of Trade
Promotion Authority (TPA) for the President in 2002. Therefore, despite the WTO
panel determinations, there appears to be little support in the 109th Congress for
repealing the CDSOA. As a result, the United States faces possible retaliation by
various WTO trading partners.
This report explains, first, U.S. antidumping and countervailing duty statutes
and investigations. Second, it describes safeguard statutes and investigative
procedures. Third, it briefly presents trade-remedy related legislation in the 109th
Congress. The appendix provides a chart outlining U.S. trade remedy statutes, major
actors, and the effects of these laws.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Congressional Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
AD and CVD Laws and Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
U.S. Statutes and Eligibility Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Petition and Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
U.S. International Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
AD and CVD Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Preliminary Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Final Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Critical Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Termination of Investigation and Suspension Agreements . . . . . . . . . . 8
Administrative and Sunset Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Outcome of AD and CVD Investigations . . . . . . . . . . . . . . . . . . . . . . 10
Antidumping Act of 1916 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Continued Dumping and Subsidy Offset Act . . . . . . . . . . . . . . . . . . . . . . . 14
AD/CVD Legislation in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . 15
New Shipper Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Application of Countervailing Duties to Nonmarket Economy Countries
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
CDSOA Repeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Other Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Safeguard (Escape Clause) Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Statutory Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 201 Eligibility Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
U.S. International Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 201 Safeguard Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ITC Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Presidential Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Midterm Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 201 Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Recent Steel Safeguard Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 406 Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
“Surge Protection” from Chinese Imports . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Safeguard Legislation in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . 25
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Appendix. Summary of U.S. Trade Remedy Laws . . . . . . . . . . . . . . . . . . . . . . . 26
List of Figures
Figure 1. AD and CVD Orders in Place by Product Group . . . . . . . . . . . . . . . . 12
Figure 2. AD and CVD Orders In Place by Country . . . . . . . . . . . . . . . . . . . . . . 13

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Figure 3. Outcome of Section 201 Safeguard Cases, 1975-Present . . . . . . . . . . 21
Figure 4. Safeguard (Section 201) Petitions and Outcome by Product Group . . 22
List of Tables
Table 1. Outcome of AD and CVD Investigations, FY1980-FY2003 . . . . . . . . 11

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Trade Remedies: A Primer
Introduction
The United States and many of its trading partners use trade remedy laws to
lessen the adverse impact of various trade practices on domestic industries,
producers, and workers. These laws are deemed consistent with U.S. international
obligations provided they conform to the trade remedy provisions agreed to as part
of the Uruguay Round of multilateral trade negotiations (1986-1994) and other trade
agreements to which the U.S. is a party.
Overview
The three most frequently applied U.S. trade remedy laws are antidumping,
countervailing duty, and safeguards. Enforcement of these laws is primarily carried
out through the administrative investigations and actions of two U.S. government
agencies: the International Trade Administration (ITA) of the Department of
Commerce, and the International Trade Commission (ITC).
Antidumping (AD) laws provide relief to domestic industries that have been, or
are threatened with, the adverse impact of imports sold in the U.S. market at prices
that are shown to be less than fair market value. The relief provided is an additional
import duty placed on the dumped imports.
Countervailing duty (CVD) laws are designed to give a similar kind of relief to
domestic industries that have been, or are threatened with, the adverse impact of
imported goods that have been subsidized by a foreign government or public entity,
and can therefore be sold at lower prices than similar goods produced in the United
States. The relief provided is an additional import duty placed on the subsidized
imports.
Safeguard (also referred to as escape clause) laws give domestic industries
relief from import surges of goods that are fairly traded. The most frequently applied
safeguard law, section 201 of the Trade Act of 1974, is designed to give domestic
industry the opportunity to adjust to the new competition and remain competitive.
The relief provided is generally an additional temporary import duty, a temporary
import quota, or a combination of both. Safeguard laws also require presidential
action in order for relief to be put into effect.
This report outlines the statutory authority, investigative procedures, and
statistical outcomes for (1) U.S. AD and CVD actions and (2) U.S. safeguard actions.
Other trade remedy laws not discussed in this report include Section 337 of the Tariff
Act of 1930, as amended, which treats as unlawful imports sold through unfair
competition or products infringing U.S. intellectual property rights. Sections 301-

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310 of the Trade Act of 1974, as amended, give the U.S. Trade Representative
authority to enforce U.S. rights under international trade agreements and act against
unfair foreign trade practices that burden U.S. trade. Trade Adjustment Assistance
(TAA) programs provide readjustment assistance for firms and workers who have
suffered due to increased imports as a result of trade agreements. A brief description
of these trade remedy laws appears in an appendix to this report.
Congressional Interest
Trade remedies have been the focus of much domestic and international debate
in recent years. On the domestic front, the preservation of U.S. authority to “enforce
rigorously its trade laws” was a key negotiating objective included in presidential
Trade Promotion Authority (TPA) in the 107th Congress (P.L.107-210).
Internationally, some WTO Member nations have become concerned that the
worldwide use of trade remedies seems to have intensified since the enactment of the
Uruguay Round Agreements in 1995. In addition, developing nations have begun
using trade remedy actions more frequently, whereas they were almost exclusively
tools used by developed nations in the past. Concern over increasing use of trade
remedy measures has led to WTO negotiations on the Agreement on Implementation
of Article VI (Antidumping Agreement) and the Agreement on Subsidies and
Countervailing Measures (Subsidies Agreement) during the Doha Round of
negotiations, despite the efforts of U.S. trade negotiators and some in Congress to
keep them off the table.
Before the Doha meeting, the House of Representatives passed H.Con.Res. 262
(107th Congress) by a vote of 410-4, calling on the President, while at the Ministerial
and in subsequent WTO negotiations, “to preserve the ability of the United States to
enforce rigorously its trade laws,” including its AD and CVD laws, and “avoid
agreements which lessen the effectiveness” of unfair trade disciplines and “to ensure
that United States exports are not subject to the abuse use of trade laws ... by other
countries.” U.S. Trade Representative Robert Zoellick defended the decision to
negotiate on AD and CVD issues by highlighting the U.S. opportunity to negotiate
an “offensive agenda” on trade remedies to address the increasing “misuse” of trade
remedy measures in other countries against U.S. exporters.
Many Members of Congress have expressed support for maintaining and
strengthening U.S. trade remedies in the face of growing import competition. Any
modifications to these statutes could affect investment and employment in important
domestic industries. For this reason, congressional oversight and presidential
reporting requirements with regard to any negotiations leading to changes in the trade
remedy laws were included as conditions to the grant of presidential Trade Promotion
Authority.
Moreover, recent WTO dispute resolution and Appellate Body panels have
found that two U.S. trade remedy provisions, the Antidumping Act of 1916 and the
Continued Dumping and Subsidy Offset Act (CDSOA), violate U.S. obligations

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under the WTO.1 The Antidumping Act of 1916 was subsequently repealed in the
Miscellaneous Trade and Technical Corrections Act of 2004 (sec. 2006 of P.L. 108-
429, December 3, 2004). Considerable congressional resistance still remains to
repealing the CDSOA, however. If Congress does not act to repeal the measures, the
United States may face trade retaliation from several major U.S. trading partners,
possibly beginning in early 2005.
AD and CVD Laws and Investigations
U.S. Statutes and Eligibility Criteria
Statutory authority for AD investigations and remedial actions is found in
Subtitle B of Title VII of the Tariff Act of 1930, as added by the Trade Agreements
Act of 1979, and subsequently amended. The law permits the imposition of
antidumping duties if (1) the Department of Commerce2 determines that the foreign
subject merchandise is being, or likely to be, sold in the United States at less than fair
value, and (2) the U.S. International Trade Commission (ITC) determines that an
industry in the United States is materially injured or threatened with material injury,3
or that the establishment of an industry is materially retarded, by reason of imports
of that merchandise.4
Statutory authority for CVD investigations is found in Subtitle A of Title VII of
the Tariff Act of 1930,5 as added by the Trade Agreements Act of 1979 and as
subsequently amended. The statute provides that countervailing duties will be
imposed, first, when Commerce determines that the government of a country or any
public entity within the territory of a country is providing, directly or indirectly, a
countervailable subsidy with respect to the manufacture, production, or export of the
subject merchandise that is imported or sold (or likely to be sold) for importation into
the United States. Second, in the case of a country that is party to the WTO
Subsidies Agreement, that has assumed similar obligations with respect to the United
States, or that has entered into certain other agreements with the United States, the
ITC must determine that a domestic industry is materially injured or threatened with
1 19 U.S.C. 1675c, P.L. 106-387, Title X. Also known as the Byrd Amendment, the act
requires that duties collected pursuant to antidumping or countervailing duty orders be
distributed annually to “affected domestic producers” for certain qualifying expenditures.
2 The International Trade Administration (ITA) of the Department of Commerce conducts
AD and CVD investigations.
3 “Material injury” is defined in 19 U.S.C. 1677(1) as “harm which is not inconsequential,
immaterial, or unimportant.”
4 U.S. International Trade Commission (U.S. ITC). Summary of Statutory Provisions
Related to Import Relief. Publication 3125, August 1998, p. 2. [http://www.usitc.gov/
publications/webpubs.html].
5 19 U.S.C. 1671 et. seq.

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material injury, or that the establishment of a domestic industry is materially retarded,
by reason of imports of that merchandise.6
Petition and Eligibility. AD and CVD investigations are conducted on the
basis of a petition filed simultaneously with the ITC and the ITA on behalf of a
domestic industry, or by the ITA on its own initiative.7 Industry representatives may
include domestic manufacturers, producers, or wholesalers of a product like the
investigated imports, unions, other groups of workers, trade associations or other
associations of manufacturers, producers or wholesalers. Petitioners may allege (1)
a subsidy (CVD petition), (2) sales at less than fair value (AD petition), or (3) that
both conditions exist.8
If a proceeding is initiated by petition, the ITA must determine within 20 days
(1) whether the petition accurately alleges the existence of dumping or subsidies, (2)
whether there is enough information in the petition to support the investigation, and
(3) whether the petition has been filed by or on behalf of an industry.9 If the ITA’s
determination at this stage is negative, the petition is dismissed and the proceedings
end.10
U.S. International Obligations
Disciplines regulating the use of antidumping laws appear in Article VI of the
General Agreements on Tariffs and Trade (GATT) and in the Antidumping
Agreement adopted in the Uruguay Round (1986-1994) of trade negotiations. The
Uruguay Round Antidumping Agreement outlines requirements regarding procedures
to be used in antidumping investigations and the implementation and duration of AD
measures.
Article XVI of the GATT and the Subsidies Agreement negotiated during the
Uruguay Round regulate the use of subsidies and countervailing measures. The
Subsidies Agreement defines the term “subsidy” as a financial contribution by a
government or public body within the territory of a WTO Member, which confers a
6 U.S. ITC Publication 3125, p. 1.
7 CVD: 19 U.S.C. 1671a(a); AD: 19 U.S.C. 1673a(a).
8 CVD: 19 U.S.C. 1671a(b)(1); AD: 19 U.S.C. 1673a(b)(1). Both citations refer to a
definition of “interested party” found in subparagraphs (C),(D),(E),(F), or (G) of 19 U.S.C.
1677(9).
9 As a general rule, the ITA determines that a petition has been filed on behalf of an
industry if (1) the domestic producers or workers supporting the petition account for at least
25 percent of the production of the domestic like product, or (2) the domestic producers or
workers who support the petition account for more than 50 percent of the domestic like
product produced by that portion of the industry expressing support for or opposition to the
petition (CVD:19 U.S.C. 1671a (c)(4)(A); AD: 19 U.S.C. 1673a(c)(4)(A)). The statute
allows for an extension of the 20-day time period if Commerce determines that the petition
does not establish sufficient industry support and must poll or survey the industry in order
to determine adequate support for the petition.
10 CVD: 19 U.S.C. 1671a(c)(3); AD 19 U.S.C.1673a(c)(3).

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benefit. Three categories of subsidies are identified: (1) prohibited subsidies, (2)
actionable subsidies, and (3) non-actionable subsidies. Also, to be covered by the
Subsidies Agreement, subsidies need to be specific to an industry, except that
prohibited subsidies (i.e., export subsidies and import substitution subsidies) are
considered per se specific.11 The Subsidies Agreement also provides transitional
rules for developed countries and Members in transition to a market economy, as
well as special and differential treatment rules for developing countries.
Other trade agreements that the United States has adopted also include specific
AD and CVD articles. For example, article 1902 of the North American Free Trade
Agreement (NAFTA) states that each party to the agreement reserves the right to
apply its antidumping and countervailing duty laws to any other party. The right of
parties to change or modify these laws is also retained, provided the amending statute
specifically states that the amendment applies to the other NAFTA parties; the other
parties are notified; and the changes are either consistent with the GATT and WTO
agreements, or the object and purpose of the NAFTA and its AD and CVD chapter.
Articles 1903 and 1904 allow a review of statutory amendments and a review of
final AD and CVD determinations by a binational panel. The Agreement also puts
a consultation and dispute settlement system in place so that other parties to the
agreement may challenge statutory changes. In addition, final determinations in AD
and CVD cases may be subject to binational panel review instead of judicial review.
AD and CVD Investigations
Although antidumping and countervailing duty laws address fundamentally
different forms of unfair trade behavior, the remedies provided (a duty reflecting the
“dumping margin” or amount of subsidy), the investigation processes, and the
economic effects of the actions are similar. In some cases, AD and CVD
investigations are also conducted simultaneously on a targeted product. Therefore,
for purposes of this report, the investigation of AD and CVD petitions will be
addressed together.
Prior to the imposition of an AD or CVD order, the ITA and ITC conduct a
detailed investigative process. Some political economists opposing this type of
import relief have pointed out that the administrative nature of the AD and CVD
investigative processes makes it easier to institute protectionist measures. They
maintain that since the statutes delegate to the administrative agencies the authority
to investigate and to impose the duties, the decisions (and possible negative political
fallout) are removed from the President and Congress.12 In addition, since a certain
amount of prior knowledge is necessary in order to follow the procedure, the process
is engineered so that it does not lend itself to close public or media scrutiny.13 Some
11 The non-actionable subsidies category was applied provisionally for five years ending
December 31, 1999 and was not extended.
12 Finger, J.M.; Hall, H. Keith; Nelson, Douglas R. “The Political Economy of
Administered Protection,” American Economic Review, 72:3 (June 1982), p. 452.
13 Ibid.

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analysts have also criticized the administrative agencies (particularly the ITA) for
conducting investigations that are biased in favor of domestic industries.14
Supporters of trade remedies point out that current AD and CVD procedures
have been worked out through painful and difficult multilateral trade negotiations,
and that this is one of the reasons that the investigative procedure is so detailed.
Furthermore, supporters maintain that the process is detailed because investigations
must be transparent and provide a voice for all parties concerned.15
Preliminary Determinations. As soon as a petition is filed, the ITC begins
to investigate whether there is a reasonable indication of injury. If the ITC’s
preliminary determination is negative, or the ITC determines that imports of the
subject merchandise are negligible, the proceedings end. The ITC must make its
preliminary determination within 45 days after a petition is filed or an investigation
is begun by the ITA on its own initiative.16

If the ITC’s preliminary determination is affirmative, the ITA begins its
preliminary investigation to determine whether the alleged unfair practice exists. In
CVD cases, the ITA has 65 days to make a preliminary determination, or 130 days
at the petitioner’s request or if the case is extraordinarily complicated.17 In AD cases,
the ITA must make its determination within 140 days, or within 190 days at the
petitioner’s request or if the case is extraordinarily complicated.18 If the ITA
determines in the affirmative, it also estimates a subsidy margin or a weighted-
average dumping margin for each exporter or producer individually investigated, and
an “all-others rate” for all other exporters.19
If the ITA finds that there is a reasonable indication of dumping or subsidies,
it orders the U.S. Customs and Border Protection (Customs) to delay the final
computation of all duties on imports of the targeted merchandise (suspension of
liquidation) until the case is resolved and to require the posting of cash deposits,
bonds, or other appropriate securities to cover the duties (plus the estimated dumping
or subsidy margin) for each subsequent entry into the U.S. market. If the ITA’s
determination is negative, both the ITA and the ITC continue the investigation.
Final Determinations. In CVD investigations, the ITA makes its final
determination within 75 days after the date of its preliminary determination. In AD
cases, ITA’s final determination must be made within 75 days after the preliminary
14 Ibid.
15 Mastel, Greg. Antidumping Laws and the U.S. Economy, New York: Economic Strategy
Institute, 1998, p. 103.
16 CVD: 19 U.S.C. 1671b(b)(2); AD: 19 U.S.C.1673b(b)(2). If ITA has extended its
deadline, the ITC must make its preliminary determination within 25 days after the ITA
informs the ITC of the initiation of the investigation.
17 19 U.S.C. 1671b(b) and (c).
18 19 U.S.C. 1673b(b) and (c).
19 CVD: 19 U.S.C. 1671b(d); AD 19 U.S.C. 1673b(d).

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determination, or within 135 days at the request of exporters (if the preliminary
determination was affirmative) or at the request of the petitioner (if the preliminary
determination was negative).20 Before issuing a final determination, the ITA must
hold a hearing upon request of any party to the proceeding.
If the ITA’s final determination is negative, the proceedings end, and any
suspension of liquidation is terminated, bonds and other securities are released, and
deposits are refunded. If the ITA’s final determination is affirmative, it orders the
suspension of liquidation if it has not already done so.
If the ITA’s preliminary determination is affirmative, the ITC must make its
final determination (a) within 120 days of the ITA’s preliminary affirmative
determination or (b) within 45 days of an affirmative final determination by the ITA,
whichever is later. If the ITA’s preliminary determination was negative, the ITC’s
determination must be made within 75 days of the ITA’s affirmative final
determination.
If the final determination of the ITC is affirmative, the ITA issues a
countervailing or antidumping duty order within seven days of notification of the
ITC’s decision. The duty imposed is equal to the net subsidy or dumping margin
calculated by the ITA. If the final determination of the ITC is negative, no AD or
CVD duties are imposed, any suspension of liquidation is terminated, bonds or other
security are released, and deposits are refunded.
Critical Circumstances. If a petitioner alleges that critical circumstances
exist in an AD or CVD case, an extra step in the investigation is required. In CVD
cases, the ITA must promptly determine whether there is a reasonable basis to expect
that the alleged subsidy is inconsistent with the WTO Subsidies Agreement and that
massive imports of the subject merchandise have occurred over a relatively short
period. In AD cases, the ITA determines (1) if there is a reasonable basis to suspect
either that there is a history of dumping and there is material injury by reason of
dumped imports in the United States or elsewhere, or if the importer knew or should
have known that the exporter was selling the merchandise at less than fair value and
knew that there was likely to be material injury by reason of such sales; and (2)
whether massive imports of the merchandise have occurred over a relatively short
period. If the ITA makes an affirmative critical circumstances finding, it extends the
suspension of liquidation of any unliquidated entries of merchandise into the United
States retroactively to 90 days before the suspension of liquidation was first ordered.
Whether or not the ITA’s initial critical circumstances determination is
affirmative, if its final determination on subsidies or dumping is affirmative, the ITA
includes with its overall final determination an additional determination on critical
circumstances. If the final determination on critical circumstances is affirmative,
retroactive duties, if not yet ordered, are ordered on unliquidated entries at this time.21
20 CVD: 19 U.S.C. 1671d; AD: 19 U.S.C. 1673d.
21 CVD: 19 U.S.C. 1671e; AD: 19 U.S.C. 1673e.

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The ITC also makes a critical circumstances injury finding along with its final
determination. If both the ITC and the ITA make affirmative critical circumstances
determinations, any AD or CVD duty order applies to the goods for which the
retroactive suspension of liquidation was ordered. If the final critical circumstances
determination of either agency is negative, any retroactive suspension of liquidation
is terminated.22
Termination of Investigation and Suspension Agreements. The ITA
may terminate or suspend antidumping or countervailing duty proceedings at any
point in favor of an alternative agreement with the foreign government (in the case
of subsidies) or the exporters (in the case of dumping).
The ITA or the ITC may terminate an investigation if the petitioner withdraws
the petition, or the ITA may terminate an investigation it initiated.23 If the ITA
decides to terminate an investigation in favor of accepting an agreement with the
foreign government (CVD) or exporter (AD) to limit the volume of imports, the ITA
must be satisfied that the agreement is in the public interest. Public interest factors
include (1) a finding that the imposition of duties would have a greater adverse
impact on U.S. consumers than an alternative agreement; (2) an assessment of the
relative economic impact on U.S. international economic interests; and (3) a
consideration of the relative impact of such an agreement on the domestic industry
producing like merchandise.24
The ITA may suspend an investigation if (1) the government of the country
alleged to be providing the subsidy, or the exporters accounting for substantially all
of the subject merchandise agree to eliminate the subsidy or dumping margin, to
offset the net subsidy completely, or to cease exports of the subject merchandise into
the United States within six months of the suspension of the investigation; (2) if there
are extraordinary circumstances25 and the government or exporters agree to take
action that will completely eliminate the injurious effect of the subject imports
(including a quantitative restriction agreement with a foreign government); or (3) the
agreement concerns alleged sales at less than fair value from a non-market economy
country and that country agrees to restrict exports of its merchandise into the United
States.26 Before suspending an investigation, the ITA must be satisfied that the
22 U.S. International Trade Commission, Publication 3125, p.5.
23 CVD: 19 U.S.C. 1671c(a)(1); AD: 19 U.S.C. 1671(a)(1). According to 19 U.S.C.
1671c(a)(3) and 19 U.S.C.1673c(a)(3), the ITC may not terminate an investigation until a
preliminary determination is made by the ITA.
24 CVD: 19 U.S.C. 1671c ; AD: 19 U.S.C. 1673c.
25 “Extraordinary circumstances” are described in 19 U.S.C. 1671c(c)(4)(A) and 19 U.S.C.
1673c(2)(A) as circumstances in which “(i) the suspension of an investigation will be more
beneficial to the domestic industry than continuation of the investigation, and (ii) the
investigation is complex.”
26 CVD: 19 U.S.C. 1671c(b)(c); AD: 19 U.S.C. 1673c(b)(c).

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CRS-9
suspension is in the public interest and that the agreement can be effectively
monitored by the United States.27
WTO Negotiations. Article 18 of the WTO Subsidies Agreement authorizes
the termination and suspension of investigations through the use of voluntary
“undertakings.” These undertakings may involve (1) the government of the exporting
Member agreeing to eliminate or limit the subsidy, or take some other action
concerning its effects; or (2) the exporter agreeing to revise its prices to eliminate the
injurious effects of the subsidy. A similar measure (Article 8) in the Antidumping
Agreement allows the use of “price undertakings,” or voluntary, mutually agreed
upon, price increases on the part of the importer to eliminate the injurious effects of
the imports. Price increases may not be higher than the duty necessary to eliminate
the dumping margin, and if a lower increase would be adequate to remove the injury,
a lesser increase is recommended.
Many WTO Members are critical of the rapidly expanding use of antidumping
and subsidies measures in general and, in particular, the perceived U.S. use of
inflated dumping and subsidies margins. As a result, these Members have
recommended that Doha Round negotiations on the Antidumping and Subsidies
Agreements strengthen the undertaking provisions and require increased use of these
voluntary measures in AD and CVD actions.28
Administrative and Sunset Reviews. Each year, during the anniversary
month of the publication of an AD or CVD duty order, any interested party may
request in writing an administrative review of the order. The ITA may also self-
initiate a review. If none of the interested parties request a review, and if there is no
objection, the review may be deferred for an additional year. During the review
process, the ITA recalculates the amount of the net subsidy or dumping margin and
may adjust the amount of AD or CVD duties on the subject merchandise.
Suspension agreements are also monitored for compliance and reviewed in a similar
fashion. The ITA must make a preliminary determination in CVD administrative
reviews within 120 (or 180 days if the 120 day deadline is not practicable), and a
final determination within 245 days (which may be extended up to 365 days).
Preliminary determinations in AD reviews must be made in 90-150 days, and final
determinations in 180-300 days.29
Administrative reviews are also mandated under certain circumstances by the
WTO Antidumping and Subsidies Agreements. Article 11.2 of the Antidumping
Agreement and Article 21.2 of the Subsidies Agreement require authorities to
periodically review the need for continued imposition of duties, where warranted.
Authorities must also conduct examinations at the request of interested parties to
examine whether the continued imposition of the duties are necessary to offset the
27 CVD: 19 U.S.C. 1671c(d); AD: 19 U.S.C. 1673c(d).
28 World Trade Organization. Doha Ministerial Declaration 2001 (WT/MIN/(01)/DEC/1),
November 20, 2001, Article 28.
29 19 U.S.C. 1675 and 19 C.F.R. 351.213.

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CRS-10
dumping or subsidies, and whether the injury would be likely to continue or recur if
the duty were removed, or varied, or both.
Changed Circumstances. An interested party may also request a “changed
circumstances” review at any time. In this case, the ITA must determine within 45
days whether or not to conduct the review. If the ITA decides that there is good
cause to conduct the review, the results must be issued within 270 days of initiation,
or within 45 days of initiation if all interested parties agree to the outcome of the
review.30
Sunset Reviews. Before passage of the Uruguay Round Agreements Act
(P.L. 103-465, URAA), AD and CVD orders had no set termination date, and
generally were revoked only if Commerce determined through three consecutive
annual administrative reviews that no dumping or subsidies had occurred. Currently,
sunset reviews must be conducted on each AD or CVD order no later than once every
five years.31 The ITA determines whether dumping or subsidies would be likely to
continue or resume if an order were to be revoked or a suspension agreement
terminated, and the ITC conducts a similar review to determine whether injury to the
domestic industry would be likely to continue or resume. If both determinations are
affirmative, the duty or suspension agreement remains in place. If either
determination is negative, the order is revoked, or the suspension agreement is
terminated.32 Sunset reviews are required in the WTO Antidumping (Article 11.3)
and Subsidies (Article 21.3) Agreements.
Outcome of AD and CVD Investigations. According to ITC statistics (see
Table 1), there were 1,058 antidumping cases with final dispositions conducted
between fiscal years 1980 and 2003.33 Fifty-nine investigations (6%) were
terminated prior to the ITC preliminary determination because the petition was
withdrawn, generally because the ITA determined that the petition was not accurate
or adequate, or because the domestic industry was not adequately represented. The
ITC made negative preliminary determinations in 186 cases (18%), thus terminating
these investigations. Affirmative preliminary determinations were made in 805
cases, meaning that the investigations continued further. Of the cases that continued,
148 investigations (18%) were terminated before the final ITC determination,
because the petition was withdrawn, because Commerce made a negative dumping
determination, or because suspension agreements were negotiated (11 cases, or 1%).
At the final stage, the ITC made 452 affirmative determinations (42%) and 224
(21%) negative determinations.
30 19 U.S.C. 1675(b).
31 19 U.S.C. 1675(c).
32 19 C.F.R. 351.218.
33 U.S. International Trade Commission. Import Industry Investigations Case Statistics (FY
1980-2003).November 2004 (Latest available official data). There were 61 cases carried
over from FY1979 (8 AD, 53 CVD) that had no preliminary determinations in FY1980.

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CRS-11
Table 1. Outcome of AD and CVD Investigations,
FY1980-FY2003
Antidumping Investigations
Total = 1058
Terminated or Withdrawn before ITC Preliminary Determination
59
6%
Preliminary ITC Determinations
Affirmative (Investigation Continues - see disposition below)
805a
Negative (Investigation Terminated)
186
18%
Terminated or Withdrawn after ITC Affirmative Preliminary
148
14%
Determination but before ITC Final Determinationa
Final ITC Determinations (requires affirmative prelim. determination above)
Affirmative
441
42%
Negative
224
21%
Countervailing Duty Investigations
Total = 452
Terminated or Withdrawn before ITC Preliminary Determination
53
12%
Preliminary ITC Determinations
Affirmative (Investigation Continues - see disposition below)
257
Negative (Investigation Terminated)
89
20%
Terminated or Withdrawn before ITC Final Determination
86
19%
Final ITC Determinations
Affirmative
117
26%
Negative
107
24%
Source: ITC Report, November 2004.
a. Eight AD cases were transition cases in 1980 and had no preliminary investigations.
During the same time period (see Table 1), the ITC conducted 452 CVD
investigations. Fifty-three cases (12%) were terminated before the ITC preliminary
determination. In the preliminary stage, the ITC made 257 affirmative
determinations and eighty-nine (20%) negative determinations. Eighty-six cases
(19%) were terminated after the preliminary determination, including cases where the
petition was withdrawn, the ITA made a negative subsidy determination, or the ITA
suspended the investigation. The ITC made affirmative final determinations in 117
cases (26%) and 107 negative final determinations (24%).
AD and CVD Duty Orders by Product Group. Figure 1 illustrates the
make up of AD and CVD orders in effect as of January 2 7, 2005 by product group.
The largest group of these orders are applied to imports of products associated with
the steel industry, including mill products (carbon steel wire rod, hot-rolled carbon
steel flat products, etc.), iron and steel pipe products (such as welded large diameter
line pipe, and oil country tubular goods), and other products of iron and steel

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CRS-12
(stainless and carbon steel butt-weld pipe fittings, ball bearings, barbed wire and
barbless wire strand, etc.). The next largest group of duty orders is applied to
chemicals and pharmaceuticals — the vast majority of which are chemicals used in
manufacturing processes. The third largest group consists of agricultural and forest
products including softwood lumber, honey, pasta, sugar, preserved mushrooms,
shrimp, crawfish tail meat, and pistachios. Relatively few orders are currently in
effect on finished consumer goods included in the miscellaneous manufactures,
transportation, textiles, and electronics categories (metal chairs and tables, stainless
steel cookware, petroleum wax candles, cotton shop towels, etc.).
Figure 1. AD and CVD Orders in Place by
Product Group
Iron & Steel Mill Products
Chemicals & Pharmaceuticals
Iron & Steel Other Products
Agricultural, Forest, Processed Foods
Minerals & Metals
Iron & Steel Pipe Products
Miscel aneous Manufactures
Polyethylene Carrier Bags
Textiles
Machinery & Equipment
Transportation
CVD
AD
Electronics and Communications
0
20
40
60
80
100
Orders by Country. Figure 2 shows AD and CVD duty orders in effect as
of February 4, 2004, by product country of origin. Products from the European
Union lead this group with fifty-two AD orders and nineteen CVD orders (about 20%
of all orders in effect), followed by China with fifty-three AD orders (15%), Japan
(thirty-one AD orders, or about 9%), and South Korea (nineteen AD orders, six CVD
orders, about 7%).

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CRS-13
Figure 2. AD and CVD Orders In Place by Country
European Union
China
Japan
Korea
Brazil
Taiwan
India
Taiwan
Canada
Mexico
Argentina
Thailand
Indonesia
Russia
Ukraine
South Africa
Turkey
Romania
Chile
Belarus
Kazakhstan
Iran
Moldova
Norway
Poland
Bangladesh
Czechoslovakia
Ecuador
Estonia
Latvia
Lithuania
Malaysia
Philippines
Pakistan
Tajikistan
Trinidad
Turkey
Turkmenistan
Uzbekistan
Vietnam
CVD
AD
Venezuela
0
10
20
30
40
50
60
70
Antidumping Act of 1916
The earliest U.S. antidumping measure, the Antidumping Act of 1916,34 made
it unlawful to systematically import articles into the United States at prices
substantially lower than the actual market value or wholesale price of the imports
with the intent of destroying or injuring a domestic industry in the United States. The
statute assigned criminal penalties and provided for a civil award of triple damages
to the injured party. A WTO dispute resolution panel and the Appellate Body found
that the law provides penalties not authorized by the Antidumping Agreement or the
GATT, and therefore violates U.S. WTO obligations. The U.S. Congress
subsequently repealed the act in Section 2006 of the Miscellaneous Tariff and
Technical Corrections Act of 2004 (P.L. 108-429), but allowed three legal cases filed
before the date of the repeal to go forward.
34 15 U.S.C. 72.

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CRS-14
Continued Dumping and Subsidy Offset Act
Section 1003 of P.L. 106-387, the “Continued Dumping and Subsidy Offset Act
(CDSOA) of 2000,” amended the Tariff Act of 1930 by requiring that all duties
collected as a result of AD and CVD orders be redistributed to the petitioners
(“affected domestic producers”) that have been injured by the subject imports. The
funds must be used for certain “qualifying expenditures,” including employee
training, research and development, manufacturing facilities, or equipment.
Disbursements under the act amounted to $231 million in FY2001 and $330 million
in FY2002, $190 million in FY2003 (with an additional $50 million held in reserve
pending the resolution of a court case), and $284 million in FY2004.35
Opponents of the CDSOA believe that the measure encourages the filing of AD
and CVD petitions, limits the benefits of collections under the act to petitioners
(placing other domestic producers at a competitive disadvantage), and is not
consistent with U.S. obligations under the WTO. The law is also controversial
because it was inserted into the legislation during conference and did not receive
committee consideration in either House.
WTO dispute settlement and Appellate Body panels have determined that the
law violates U.S. obligations under the WTO Antidumping and Subsidies
Agreements. The level of retaliation has been determined through arbitration, and
most of the co-complainants in the case, including the European Union, India, Japan,
and Korea, received formal authorization to “suspend concessions” (retaliate) until
the United States repeals the measure, in late November 2004. In April 2005, Canada
and the European Union announced plans to begin retaliation beginning May 1, 2005.
Canada plans to place an additional 15% tariff on U.S. imports of live swine,
cigarettes, oysters, and certain specialty fish (e.g. ornamental fish, tilapia,
monkfish).36 The European Union proposes to establish an additional 15% tariff on
imports of certain women’s apparel, office supplies, crane trucks, sweet corn, and
spectacle frames, also beginning on May 1, 2005.37 According to WTO obligations,
any retaliation is temporary, and may only occur if “recommendations and rulings
are not implemented in a reasonable period of time.38
The CDSOA has considerable support in Congress. In a February 4, 2003 letter
to President Bush, 70 Senators expressed support for the law and against the WTO
35 U.S. Department of Homeland Security. U.S. Customs and Border Protection. CDSOA
FY2004 Annual Report. [http://www.customs.gov/xp/cgov/import/add_cvd/].
36 Canada Department of Foreign Affairs and International Trade. “Byrd Amendment:
Canada to Retaliate Against United States,” United States,” News Release No. 56, March
31, 2005.
37 Commission on the European Communities. Proposal for a Council Regulation
Establishing Additional Customs Duties on Imports of Certain Products Originating in the
United States of America. Brussels, March 31, 2005.
38 World Trade Organization. Understanding on Rules and Procedures Governing the
Settlement of Disputes, Article 22:1.

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CRS-15
ruling.39 Supporters of trade remedies, including many in Congress and domestic
industry representatives, believe that money distributed through the CDSOA is a
relatively small amount to invest in assisting U.S. companies to remain competitive.
Critics, however, including many economists, say that AD and CVD actions restrict
the free flow of trade across borders and cause market inefficiency. Therefore, the
cost to the economy as a whole may be much more than the cost of the import duties
alone. Although domestic producers gain from trade remedies, the gains come at the
expense of consumers and creation of deadweight losses. In addition, once exporters
(some of whom may also be recipients of CDSOA disbursements) begin to feel the
adverse effects of retaliation, some predict that the popular support for the act may
shift.40
AD/CVD Legislation in the 109th Congress
New Shipper Reviews. S. 695 (Cochran, introduced April 4, 2005) and H.R.
1039 (Pickering, introduced March 2, 2005) seek to amend the Tariff Act of 1930
to modify the way that the administering authority (ITA) reviews and establishes
individual weighted average dumping margins or countervailing duty rates for new
shippers, defined as new exporters or producers that did not previously export the
subject merchandise and were not affiliated with any exporter or producer who did.
In current law, the ITA is required to direct the Customs Service to allow the
importer (at the option of the importer) to post a bond or security in lieu of a cash
deposit for each entry of merchandise until the review is completed. S. 695 and H.R.
1039 would suspend this requirement for three years, thus requiring cash deposits for
each entry. The legislation would also require the Secretary of Commerce, in
consultation with other agencies, to submit a report to Congress no later than two
years after enactment (1) recommending whether or not the suspension should be
extended; and (2) assessing the effectiveness of administrative measures in
addressing the difficulties that gave rise to the suspension of new shipper bonding
privileges.
Application of Countervailing Duties to Nonmarket Economy
Countries. S. 593 (Collins, introduced March 10, 2005) and H.R. 1216 (English,
introduced March 10, 2005) seek to require that countervailing duty investigations
must apply to nonmarket economy (NME) countries. CVD laws do not currently
apply to NME countries due to a previous determination by ITA (also statutorily
responsible for making NME determinations) that there is no adequate way to
measure market distortions caused by subsidies in an economy that is not based on
market principles.41
39 Senate Letter on CDSOA, February 4, 2003, available at [http://www.insidetrade.com].
40 Blonigen, B.A. and Prusa, T. J. “Antidumping.” Cambridge, MA: National Bureau of
Economic Research (NBER) Working Paper No. 8398, p. 26.
41 The ITA last made this determination in two 1983 investigations of steel wire rod from
Czechoslovakia (49 F.R. 19370) and Poland (49 F.R. 19374). The determination was
challenged by the steel industry in the U.S. Court of International Trade, which reversed
(continued...)

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CRS-16
Some Members of Congress have become concerned that the Peoples’ Republic
of China, currently classified by ITA as a nonmarket economy country,42 is providing
subsidies to many Chinese industries engaged in international exports. A related
source of concern is that China is pegging its currency, the yuan, to the U.S. dollar
at artificially low levels, which some also believe is an unfair government subsidy.
China is the United States’ third largest trading partner in terms of imports ($196
billion in 2004) and largest trading partner in terms of trade deficit ($164 billion in
2004).
A related measure, H.R. 1498 (Ryan, introduced April 6, 2005) seeks to clarify
that China’s exchange-rate manipulation is actionable under the countervailing duty
provisions, as well as product-specific safeguard measures in U.S. trade laws.
CDSOA Repeal. H.R. 1121 (Ramstad, introduced March 3, 2005) seeks to
repeal the CDSOA and require that all funds collected pursuant to AD and CVD
orders, including any amounts remaining in any special accounts, be deposited in the
general fund of the Treasury. This bill is cosponsored by Representative E. Clay
Shaw, chairman of the Committee on Ways and Means Trade Subcommittee.
The Bush Administration’s budget for FY2006 also includes a proposal seeking
to repeal the CDSOA. Similar language also appeared in the FY2005 and FY2004
budgets.
Other Legislation. H.R. 1407 (La Tourette) seeks to provide that certain
wire rods shall not be subject to any antidumping or countervailing duty order.
Safeguard (Escape Clause) Measures
So-called safeguard or escape clause trade laws are designed to provide
domestic industries with relief from injurious import surges resulting from fairly
competitive trade. In order to obtain relief, the ITC must determine that a domestic
industry is substantially injured by import surges. Relief under these statutes requires
presidential action.
41 (...continued)
the ITA’s decision and held that CVD law covers non-market economies (Continental Steel
Corp. v. United States, 9 C.I.T., 614 F. Supp. 548, 550; C.I.T. 1985). This decision was
subsequently overturned by the U.S. Court of Appeals for the Federal Circuit (Georgetown
Steel Corporation, et al. v. the United States, 801 F.2d 1308; Fed. Cir. 1986).
42 ITA is responsible for NME classification pursuant to 19 U.S.C. 1677(18)(B). The
applicability of NME classification with regard to China was determined in the Preliminary
Determination of Sales at Less than Fair Value, Greige Polyester Cotton Print Cloth from
China (48 F.R. 9897). Any determination that a foreign country is a non-market economy
country remains in effect until revoked by the ITA (19 U.S.C.1677(18)(C)(i)). Trade figures
are from International Trade Commission Trade Data Web [http://dataweb.usitc.gov]. Other
NME countries include Vietnam and the Ukraine.

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CRS-17
Although individual U.S. safeguard actions (in particular, the action on steel)
have been the subject of intense debate, on the whole, many economists find
safeguard measures less objectionable than AD or CVD actions. Some reasons for
this include their temporary nature, the requirement that industries take steps to
positively adjust to import competition, the higher injury threshold, and the
requirement of Presidential action.43
Statutory Authority
Sections 201-204 of the Trade Act of 1974, as amended,44 provide relief for
imports from all countries. Investigations under this statute are often known as
“section 201 investigations.” Section 406 of the same Act, as amended,45 provides
a similar relief for market-disruptive imports from communist countries. Section
421, added to the Trade Act of 1974 in October 2000,46 is a country-specific trade
remedy that applies only to injurious imports from China. Another provision,
Section 302 of the NAFTA Implementation Act,47 provides similar relief due to
injurious imports originating in Canada or Mexico.
Section 201 Eligibility Criteria
A Section 201 investigation may be initiated by the filing of a petition by any
group considered to be representative of an industry, including a trade association,
firm (especially if the firm is the sole domestic producer), a certified or recognized
union, or group of workers.48 An investigation may also be initiated at the request
of the President or the USTR, by a resolution of the House Ways and Means or
Senate Finance Committees, or by a motion of the ITC itself.49
The ultimate goal of a section 201 action is to facilitate a domestic industry’s
positive adjustment to import competition. The petition for relief must also include
a statement describing specific purposes for which the action is being sought (e.g.,
to allow time for the domestic industry to transfer its resources into other productive
pursuits) and may include a plan submitted by the petitioner to facilitate the
industry’s positive adjustment to import competition (if a plan is not filed with the
petition, it must be filed within 120 days). Section 201 relief may apply to imports
of the targeted merchandise from all countries or from any country specifically
identified as a cause of the import surges.
43 Lawrence, Robert Z. and Litan, Robert E. Saving Free Trade: A Pragmatic Approach.
Washington, D.C.: Brookings, 1986, p. 97.
44 19 U.S.C. 2251-2254.
45 19 U.S.C. 2436.
46 19 U.S.C. 2451, as added by section 103 of P.L. 106-286, Division A, Normal Trade
Relations for the People’s Republic of China.
47 19 U.S.C. 3352.
48 19 U.S.C. 2252(a)(1).
49 19 U.S.C. 2252(b)(1)(A).

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CRS-18
U.S. International Obligations
Article XIX of the GATT, Emergency Action on Imports of Particular Products,
authorizes contracting parties to “suspend the obligation in whole or in part or to
modify the concession” in the event of “unforseen developments” caused by
obligations or tariff concessions under the Agreement.50 The WTO Safeguards
Agreement provides rules for the application of Article XIX. Under the Agreement,
safeguard measures are considered “emergency”actions with respect to imports of
particular products. WTO provisions require that safeguard measures: (1) be time-
limited; (2) be imposed only when imports are found to cause or threaten serious
injury to a competing domestic industry; and (3) be applied on a non-selective (i.e.,
most-favored-nation) basis, and (4) be progressively liberalized while in effect. In
addition, the Member imposing a safeguard is expected to maintain a substantially
equivalent level of concessions between it and exporting Members affected by the
safeguard. To achieve this, Members may agree on compensation; if negotiations
fail, the exporting Member may, in certain circumstances, suspend concessions vis
a vis the Member imposing the safeguard.
Article 8 of the NAFTA allows any party subject to the agreement to use
bilateral (within the NAFTA) “emergency actions” if an import surge or a duty
reduction is a substantial cause of serious injury to a domestic industry.
Consultations between affected parties are required. The remedy allowed is a
suspension in the further reduction of a duty, or an increase in the rate of duty at a
level not to exceed (1) the most-favored-nation (MFN) applied rate of duty in effect
at the time the action is taken, or (2) the MFN applied rate of duty in effect on the day
immediately preceding the date of entry into force of the NAFTA. In the case of
seasonal products, the duty rate applied cannot exceed the MFN applied rate of duty
that was in effect on the good for the corresponding season immediately preceding
the date of entry into force of the NAFTA. For most products, the term of a
safeguard action may not last more than three years.
Each party to the NAFTA also retains the right to engage in global safeguard
actions under Article XIX of the GATT, but must exclude other parties to the
NAFTA unless (1) imports from a party, considered individually, account for a
substantial share of the imports and (2) imports from a party, considered individually,
or in extreme circumstances, collectively, contribute importantly to the injury, or
threat thereof, caused by imports. Proposed emergency actions are not subject to
dispute settlement proceedings under the NAFTA.
Safeguard provisions are also included in the U.S.-Jordan Free Trade Agreement
(FTA), the U.S.-Singapore FTA and the U.S.-Chile FTA.
Section 201 Safeguard Investigations
ITC Role. The ITC determines whether the targeted merchandise is being
imported in such increased quantities that it is a “substantial cause of serious injury,
50 General Agreement on Tariffs and Trade, Article XIX.1(a) and (b).

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CRS-19
or threat of serious injury”51 to the domestic industry producing articles “like or
directly competitive with” the imported article.52 The ITC must normally make its
injury determination within 120 days, but it may take up to 30 additional days to
make a determination if the investigation is extraordinarily complicated. If the ITC
finds in the affirmative, it also provides the President with one or more remedy
recommendations. The ITC’s report must be submitted to the President within 180
days of the petition, or within 240 days if critical circumstances are alleged.53
Provisional Relief. If critical circumstances are alleged to exist and the
petitioner requests that provisional relief be provided, the ITC must make a
determination on critical circumstances within 60 days of receiving the petition. If
the critical circumstances determination is affirmative, the ITC must also recommend
the amount of relief necessary (preference is given to increasing or imposing a duty
on imports) to prevent or remedy the injury. The ITC must immediately report its
findings to the President.54
Within 30 days of receipt of an affirmative determination from the ITC, if the
President finds that provisional relief is warranted, he may proclaim whatever
provisional relief he believes necessary for a period not to exceed 200 days.55
Perishable Products. Provisional relief may also be requested if the targeted
merchandise is a perishable agricultural or citrus product. In these cases, the industry
representative files a request with the USTR (in advance of a section 201 petition)
for monitoring of imports of the product. The USTR determines (within 21 days) (1)
if the imported product is a perishable agricultural or citrus product and (2) if there
is a reasonable indication that the product is being imported in such increased
quantities as to be, or likely to be, a substantial cause of serious injury, or threat of
serious injury, to the domestic industry. If these determinations are affirmative, the
USTR requests the ITC to monitor and investigate the imports for a limited time
period, not to exceed two years.56
In order to receive provisional relief, the perishable product must be the subject
of ITC monitoring for at least 90 days prior to initiation of the investigation, and the
petitioner must request provisional relief. The ITC has 21 days to make an injury
determination, and immediately reports its findings and remedy recommendations to
the President. If the ITC makes an affirmative determination the President has seven
days to proclaim whatever provisional relief he considers necessary to prevent or
51 “Substantial cause” is defined in 19 U.S.C. 2252(b)(1)(B) as “a cause which is important
and not less than any other cause.” Criteria for assessing “serious injury” are described in
19 U.S.C. 2252(c)(1)(A).
52 19 U.S.C. 2252(c).
53 19 U.S.C. 2252(f)(1).
54 19 U.S.C.2252(d)(1)(E) and (F).
55 19 U.S.C. 2252(d)
56 19 U.S.C. 2252(d)(1)(B) and (C).

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CRS-20
remedy the serious injury. If the ITC’s determination is negative, no relief is given
and the proceeding is terminated.57
Presidential Action. Within 60 days of receipt of an affirmative ITC
determination and report, the President is instructed to “take all appropriate and
feasible action within his power which the President determines will facilitate efforts
by the domestic industry to make a positive adjustment to import competition and
provide greater economic and social benefits than costs.” On this basis, the President
may (1) implement the ITC’s recommendations, (2) modify the ITC provisions or
provide another form of remedy, or (3) take no action due to U.S. economic or
national security interests.58
Import relief may be granted for an initial period of up to four years and
extended one or more times.59 The total period of relief, however, may not exceed
eight years. If the President decides not to provide relief, or to provide relief other
than that recommended by the ITC, his decision may be overridden by a
congressional joint resolution (adopted within 90 days), in which case the ITC’s
recommendations would be implemented.60
Midterm Review. The ITC is required to monitor section 201 actions as long
as they stay in effect, especially with respect to the efforts and progress of the
domestic industry and workers to adjust positively to import competition.61 If the
initial period of the action exceeds three years, the ITC is also required to submit a
midterm review to the President and Congress. The ITC holds a hearing in which
any interested parties may participate, and upon request, advises the President of the
probable economic impact of any reduction, modification or termination of the
action.62
After the President receives the ITC review and seeks the advice of the
Secretary of Commerce and the Secretary of Labor, he may modify, reduce, or
terminate the action if he determines that changed circumstances warrant such actions
either because: (1) the domestic industry has not made adequate efforts to adjust
positively to import competition, or (2) the effectiveness of the action has been
impaired by changed economic circumstances. He may also terminate, modify, or
reduce the action if the majority of industry representatives petition the President to
do so on the basis of positive adjustment to import competition.63
The President may also extend an action. Between six and nine months before
the safeguard action is scheduled to terminate, at the request of the President or if an
57 19 U.S.C. 2252(d)(1)(A).
58 19 U.S.C. 2253.
59 19 U.S.C. 2253(e)(1)(A) and (B).
60 19 U.S.C. 2253(c).
61 19 U.S.C. 2254(a)(1).
62 19 U.S.C. 2254(a)(2) and (3).
63 19 U.S.C. 2254(b).

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industry petition is filed, the ITC must investigate to determine whether an extension
of the action is necessary and if the domestic industry is making positive adjustment
to import competition. Within 60 days of the termination date, the ITC must transmit
the results of the investigation and its determination, unless the President specifies
a different date.64
Section 201 Outcomes. In the seventy-three section 201 safeguard
investigations conducted from 1975 to date, the ITC has recommended some form
of relief 47% of the time. The President has provided import relief in twenty-six
instances (35.6%).65
Figure 3 illustrates the outcome of section 201 cases from FY1975 to the
present. In the cases in which the President granted relief, the most common form
has been tariff increases, followed by adjustment assistance, tariff rate quotas, or
some combination thereof.
Figure 3. Outcome of Section 201 Safeguard Cases, 1975-
Present
Income Supplement 1
Marketing Agreement 3
Combination 3
ITC Negative 33
Tariff Rate Quota 4
Relief Granted 26
Adjustment Assistance 6
President Negative 14
Tariff Increase 9
64 19 U.S.C. 2254(c).
65 See CRS Report RL31396, Section 201 of the Trade Act of 1974: Summary of Provisions
and History of Investigations, by George Mangan for a listing of safeguard investigations
and outcomes through 2002.

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Figure 4. Safeguard (Section 201) Petitions and
Outcome by Product Group
Miscellaneous
Agriculture
Iron and Steel Mill Products
Minerals & Metals
Iron and Steel Other Products
Electronics
Textiles
Transportation
Iron and Steel Pipe Products
Chemicals
Machinery & Equipment
0
5
10
15
20
25
Outcome
Petitions
Source: ITC
Figure 4 shows section 201 safeguard petitions and their outcome by product
group. The largest number of petitions has been filed in the category of miscellaneous
manufactures, such as footwear, stainless steel flatware, fishing tackle, fishing rods,
and clothespins. Agricultural products are the second largest category, including
asparagus, mushrooms, shrimp, honey, roses, and cut flowers. It appears, generally,
that a greater percentage of domestic producers of end-use consumer goods have filed
and obtained relief through safeguard petitions as opposed to AD or CVD orders.
Recent Steel Safeguard Action
On June 5, 2001, President Bush responded to steel companies, union
representatives, and many in Congress by requesting that the ITC begin a broad
section 201 investigation on steel import surges. The request, covering more than
500 steel mill products, was forwarded to the ITC by USTR Robert Zoellick on June
22. The ITC staff grouped this large number of products into 33 product categories
under four broad groupings. For each of these 33 categories, the ITC investigated
whether or not imports of the subject merchandise were a substantial cause of serious
injury to the domestic steel industry.
On September 17, 2001, the ITC began a series of hearings on the issue of injury
to the domestic steel industry, and on October 22, 2001, made an affirmative
determination in 16 of the 33 product categories. Products in the remaining 17
categories were dismissed from further consideration. The ITC continued the remedy
phase of the investigation for the 16 categories, and held hearings in November 2001.
On December 19, 2001, the ITC submitted its findings and remedy recommendations

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to the President.66 On March 5, 2002, President Bush announced trade safeguard
remedies for all products that the ITC had found substantial injury, except for two
steel specialty categories.67
The President’s implementation of safeguard measures on steel was
controversial both domestically and internationally. A number of U.S. trading
partners challenged the decision through the WTO, and on July 11, 2003, the dispute
settlement panel found that the safeguard measures were inconsistent with U.S. WTO
obligations. An Appellate Body determination confirmed the main points of the
panel decision on November 10, 2003. After the WTO panel rulings, the European
Union announced that it would retaliate by establishing substantial tariff penalties
against $2 billion in imports from the United States beginning in December 2003.
The President terminated section 201 safeguard measures on steel in December
8, 2003.68 USTR Robert Zoellick stated that the termination was the result of a
midterm review of the progress of the steel industry to cope with the increased
competition and changed economic circumstances. The United States faced
retaliation from the European Union equivalent to $2.2 billion in increased tariffs on
U.S. exports due to WTO dispute settlement and Appellate Body findings. In the
proclamation, the President continued the licensing and monitoring of imports of
certain steel products and delegated the function to the Secretary of Commerce.
Section 406 Relief
Section 406 of the Trade Act of 1974,69 as amended, was established to provide
a remedy against market disruption caused by imports from Communist countries.
This statute applies to any Communist country, whether or not it has received non-
discriminatory (normal trade relations) treatment. This provision was enacted out of
concern that trade remedy laws already in place were insufficient to deal with a rapid
influx of imports that can result from Communist country control of its industry
pricing levels and distribution process. Section 406 investigations follow a similar
format to section 201 proceedings, however, the standard of injury is lower. Import
relief may apply only to imports from the subject Communist country or countries.
If the President decides to grant relief, he may do so for up to five years, with the
possibility of an extension of up to three years.
66 All public documents regarding the ITC steel investigation are available on the ITC
website, [http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/2003/
204_steel/finalphase.htm].
67 To Facilitate Positive Adjustment to Competition from Certain Steel Products,
Proclamation 7529, March 5, 2002 (67 F.R. 10593).
68 Proclamation 7741, 68 F.R. 68481.
69 19 U.S.C. 2451.

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“Surge Protection” from Chinese Imports
A country-specific safeguard on imports from China is found in section 421 of
the Trade Act of 1974.70 This provision, enacted in section 103 of Public Law 106-
286, superseded section 406 with respect to goods from China after the President
extended permanent nondiscriminatory (normal trade relations) treatment to China
following its accession to the World Trade Organization (WTO).71 The legislation
implemented an anti-surge mechanism established under the U.S.-China Bilateral
Trade Agreement, concluded on November 15, 1999. This transitional safeguard
measure is scheduled to terminate 12 years after China’s WTO accession.
According to the Protocol on the Accession of China to the WTO, import relief
may be granted “only for such period of time as may be necessary to prevent or
remedy the market disruption.” If import relief is granted due to a relative increase
in imports, China may retaliate by suspending equivalent trade concessions or
obligations if the measure remains in effect for more than two years. If relief is
granted due to an absolute increase in imports, China may retaliate after three years.72
Although the procedure under section 421 action is similar to that under section
201, the section 421 safeguard is different in four major respects: (1) the statute
provides relief for subject merchandise from China only, whereas the remedy in
section 201 applies to subject imports from all countries; (2) consultations with
Chinese trade authorities are required; (3) in addition to the ITC, the USTR takes part
in the procedure and also submits recommendations to the President; and (4) the
standard for relief is “market disruption” — a lower standard than in section 201
proceedings.
To date, there have been five completed section 421 investigations, as follows:
Pedestal Actuators (ITC case number TA-421-1), Wire Hangers (TA-421-2), Brake
Drums and Rotors (TA-421-3), and Ductile Iron Waterworks Fittings (TA-421-4),
and Uncovered Innerspring Mattress Units (TA-421-5). The ITC made affirmative
determinations in three of these cases and negative determinations in two cases
(brake drums and rotors and innerspring mattress units). The President decided not
to grant relief each of the three affirmative investigations because he determined that
providing import relief was not in the national economic interest of the United States.
70 P.L.93-618, Section 421, as added by section 103(a)(3) of P.L. 106-286, 19 U.S.C. 2451.
71 To Extend Nondiscriminatory Treatment (Normal Trade Relations Treatment) to the
Products of the People’s Republic of China, Proclamation 7616 of December 27, 2001, 67
F.R. 479.
72 An absolute increase in imports would be illustrated on the basis of a surge in imports of
the subject merchandise in one year as opposed to low or zero imports of the merchandise
in previous years. A relative increase is found if the ratio of imports relative to domestic
production is rapidly increased from one year to the next.

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Safeguard Legislation in the 109th Congress
H.R. 1498 (Ryan, introduced April 6, 2005) seeks to clarify that China’s
exchange-rate manipulation is actionable under the countervailing duty provisions,
as well as product-specific safeguard measures in U.S. trade laws.
Conclusion
Trade remedies are popular with many in Congress because they help to mitigate
the adverse effects of international trade on domestic industry, producers, and
workers. In 2004, certain key industries are facing the adverse effects of import
competition, leading to factory closures and loss of domestic manufacturing jobs in
many districts. In addition, service sector workers are beginning to feel the effects
of import competition due to offshore outsourcing. These factors, among others, are
reasons that many in Congress do not support repeal or weakening of these laws and
insist that the United States must preserve the ability to “rigorously enforce its trade
laws.”
Competitive advantage and a liberalized world trading system create both
winners and losers in domestic economies. Acting on legislation in a manner
consistent with previously agreed upon multilateral commitments, while balancing
that action with the need to regulate and minimize unfair trade practices and to aid
domestic import-competing industries to become more internationally viable presents
Congress with unique challenges.

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CRS-26
Appendix. Summary of U.S. Trade Remedy Laws
Statutory Authority
Purpose
Administering Agencies
Remedy
Countervailing Duty
To offset any unfair and injurious advantage that
Department of Commerce
Countervailing duties are imposed when two conditions
(CVD).
foreign manufacturers, producers, or exporters of
(ITA)
are met: (a) Commerce determines that the government
Tariff Act of 1930, Title
a class or kind of merchandise might have over
of a country or public entity is providing, directly or
VII, as amended (19 U.S.C.
U.S. producers as a result of a foreign authority
U.S. International Trade
indirectly, a countervailable subsidy with respect to the
1671 et seq.)
providing a financial contribution, any form of
Commission (ITC)
manufacture, production, or export of the subject
income or price support, or a payment to a
merchandise; and (b) the USITC determines that a U.S.
funding mechanism to provide the above.
industry is injured, threatened with material injury, or
that the establishment of an industry is materially
retarded, due to imports of that merchandise.
Antidumping (AD). Tariff
To offset any unfair and injurious advantage that
ITA, ITC
Antidumping duties are imposed when two conditions
Act of 1930, Title VII, as
a class or kind of foreign merchandise might
are met: (a) Commerce determines that the foreign
amended (19 U.S.C. 1673 et
have over a similar U.S. product as a result of the
subject merchandise is being, or is likely to be, sold in
seq.)
imported product being sold in the United States
the United States at less than fair value; and (b) The
at less than fair market value (less than
USITC determines that a U.S. industry is materially
comparable goods are sold in the home market,
injured, threatened with material injury, or that the
or in other export markets.
establishment of an industry is materially retarded,
because that merchandise is imported.

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CRS-27
Statutory Authority
Purpose
Administering Agencies
Remedy
Sections 201-204 of the
Provides for investigations as to whether an
ITC, President
Action may be taken in the form of an increase in or
Trade Act of 1974, as
article is being imported into the United States in
imposition of a duty, a tariff-rate quota, a modification or
amended (19 U.S.C. 2251
such increased quantities to be a substantial cause
imposition of a quantitative restriction, one or more
to 2254)
of serious injury, or the threat thereof, to a
appropriate measures of trade administration assistance,
domestic industry producing an article like or
or a combination of these actions.
directly competitive with the imported article.
Gives the President authority to withdraw or
modify concessions and impose duties or other
restrictions for a limited period of time on
imports of any article which causes or threatens
serious injury to the domestic industry producing
a like or directly competitive article.
Section 406 of the Trade
Provides for remedy against market disruption
ITC, President
Action may be taken in the form of increased rates of
Act of 1974, as amended
caused by imports from communist countries.
duty or quantitative restrictions that will prevent or
(19 U.S.C. 2436).
remedy the market disruption. Temporary emergency
action may also be taken.
Section 421 of the Trade
Provides for remedy against market disruption
ITC, USTR, President
Action may be taken in the form of increased rates of
Act of 1974, as amended
caused by imports from the Peoples’ Republic of
duty or quantitative restrictions that will prevent or
(19 U.S.C. 2451)
China
remedy the market disruption. Temporary emergency
action may also be taken. Consultations with China are
also required to attempt to resolve the market disruption.

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CRS-28
Statutory Authority
Purpose
Administering Agencies
Remedy
Section 301 of the Trade
Provides for investigations into allegations that
USTR
Benefits of trade agreement concessions may be
Act of 1974, as amended
(1) foreign countries are denying rights or
suspended, withdrawn, or prevented; or duties or other
(19 U.S.C. 2411 et seq.)
benefits under trade agreements or violating trade
import restrictions may be imposed. Binding agreements
agreements to which the United States is a party;
with the foreign country to eliminate or phase out the
or (2) the act, policy, or practice of a foreign
action or restriction may also be entered into.
country is unjustifiable and burdens or restricts
U.S. commerce. Sec. 301(a) requires mandatory
action, if the USTR determines that the above
conditions have occurred, unless the WTO has
adopted a report, or a dispute resolution
proceeding under any other trade agreement has
found, that rights of the United States have not
been violated, or the USTR finds inter alia that
the country has agreed to eliminate the practice,
or taking action would cause serious harm to
U.S. national security. Sec. 301(b) provides for
“discretionary action” if an act, policy, or
practice of a foreign country is “unreasonable or
discriminatory and burdens or restricts United
States commerce.”

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CRS-29
Statutory Authority
Purpose
Administering Agencies
Remedy
“Special 301.” Section 182
The USTR is required, no later than 30 days of
USTR
The USTR is required to initiate Section 301
of the Trade Act of 1974, as
release of the National Trade Estimates Report
investigations with respect to priority countries or
amended (19 U.S.C. 2242)
(NTE) to identify foreign countries that (1) deny
consult with the countries (unless he determines that an
adequate and effective protection of intellectual
investigation would be detrimental to U.S. economic
property, or (2) deny fair and equitable market
interests) and if possible, secure agreements for the
access to U.S. persons that rely on intellectual
elimination of barriers.
property protection. The USTR is also required
to determine which of these are priority foreign
countries, that is, those with the most onerous or
egregious practices.
Section 337 of the Tariff
Declares unlawful unfair methods of competition
ITC
The ITC may issue an exclusion order and/or a cease-
Act of 1930, as amended
and unfair acts in the importation or sale of
and-desist order.
(19 U.S.C. 1337 et seq.)
articles, the threat or effect of which is to (1)
destroy or substantially injure an industry; (2)
prevent the establishment of such an industry; or
(3) restrain or monopolize trade and commerce in
the United States. Also declares unlawful the
importation or sale of that infringe a valid,
enforceable, and registered U.S. patent,
trademark, or mask work (of a semiconductor
chip product).
National Security Import
Applies to imports that may threaten to impair
Commerce, Defense, President
Commerce investigates and holds public hearings.
Restrictions. Sections 232
national security
Commerce consults with the Defense Department on
and 233, Public Law 87-
methodological and policy questions. Restrictions may
794, Trade Expansion Act
be imposed on these imports.
of 1962 (19 U.S.C. 1862,
1864, as amended)

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Statutory Authority
Purpose
Administering Agencies
Remedy
Trade Adjustment
Provides technical assistance to eligible firms
Commerce
Eligible firms may apply for technical assistance to
Assistance for Firms.
which (1) apply to Commerce for certification of
implement recovery strategy.
Chapter 3 of Title II of the
eligibility and (2) propose adjustment proposal
Trade Act of 1974 (19
that describes the firm’s recovery strategy and
U.S.C. 2431 et seq.)
type of technical assistance it is seeking.

Trade Adjustment
Provides trade adjustment assistance for eligible
Department of Labor (Labor),
Eligible workers may receive trade readjustment
Assistance for Workers.
U.S. workers if (1) a group of workers or their
State agencies
allowances, training and reemployment services, and
Chapter 2 of Title II of the
certified or recognized union or representative
relocation and/or job search allowances.
Trade Act of 1974 (19
files a petition with the Department of Labor’s
U.S.C. 2271 et seq.)
Office of Trade Adjustment Assistance for
certification of eligibility, and (2) the individual
worker is approved for benefits by the State
agency administering benefits.
Sources: U.S. International Trade Commission. Summary of Statutory Provisions Related to Import Relief. USITC Publication 3125, August 1998.
United States Code Annotated (USCA) Title 19, Customs Duties
U.S. Congress. House of Representatives. Committee on Ways and Means. Overview and Compilation of U.S. Trade Statutes (2001), WCMP 107-4.

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