July 14, 2015 2:56PM

ITC Vote Clears Way for New Tire Taxes…and More Frivolous Cases

By Daniel J. Ikenson

In a 3-to-3 vote today, the U.S. International Trade Commission determined that the domestic industry producing passenger car and light truck tires was materially injured by reason of dumped and subsidized imports from China. Wait, what?  Yes, that's right.  Despite the Washington protectionism lobby's self-portrayal as victims of unfair foreign trade practices who are forced to surmount the highest of hurdles before they can "obtain relief" at everyone else's expense, tie votes go to the protectionists.  A negative determination would have required four votes. Here's what I wrote about the case on Friday.

So:

  • even though respondents were tasked with having to convince 33.3% more commissioners than were the petitioners; 
  • even though the "domestic industry" was a single labor union representing workers at plants accounting for only 40% of tire production capacity;
  • even though not a single domestic tire producer supported the AD/CVD petitions;
  • even though the costs of the prospective AD/CVD duties on downstream industries (vehicle manufacturers, tire wholesalers and retailers, rental car companies, Uber drivers, etc.), consumers, and national economic welfare are all statutorily forbidden from being considered by the ITC;
  • even though the effects of three years of duties on the exact same kinds of tires from China (from 2009-2012) demonstrate that domestic production will not increase, but imports from other countries will;
  • even though duty calculations are inflated by a sympathetic and pliable Commerce Department agency called "Enforcement and Compliance," which routinely engages in methodological sleight of hand;
  • and, even though the antidumping and countervailing duty laws -- protected from adequate scrutiny because they're portrayed as tools to level the playing field with unscrupulous foreigners exploiting unfair practices -- are routinely abused by U.S. companies and unions to kneecap domestic competition or to obtain greater market or bargaining power...

Congress just passed and the president just enacted legislation to relax to evidentiary requirements and other burdens of proof on petitioners in these kinds of cases.

So, with the steel industry (and others) chomping at the bit to test out these new provisions, don't be surprised to see a flow of new cases and the emergence of trade lawyering as a growth industry.