U.S. House approves tariff bill on China, Vietnam

The U.S. House of Representatives passed a bill Tuesday to ensure the government can impose controversial countervailing duties (CVDs) on imports from China and Vietnam after the legislation was approved in the Senate Monday.

The House voted 370 to 39 to restore the U.S. Department of Commerce's capability to impose duties on subsidized goods from so-called non-market economy (NME) countries like China and Vietnam.

The bill, which overturned a recent federal court ruling, was waiting for President Barack Obama's signature before becoming a law.

In December 2011, the U.S. Court of Appeals for the Federal Circuit ruled out the bill, saying the Commerce did not have legal authority to impose CVDs on goods from non-market economy countries.

The court explained that government payments can't be characterized as "subsidies" in an NME context, saying the Obama administration lacked the legal ground to impose a three-year tariff on imports of low-grade Chinese tires in September 2009, which U.S. authorities claimed enjoyed unfair government subsidies.

U.S. Trade Representative Ron Kirk, at a hearing on Feb. 29 said "this flawed decision jeopardizes the ability of the United States to remedy the harmful effects of unfairly subsidized imports."

Both the House and the Senate acted soon after the hearing to introduce a bill to remedy the Tariff Act of 1930 and overturn the federal court decision.

But a political group named Club for Growth urged lawmakers to oppose the legislation because it "makes it clear that Congress wants to escalate its trade war rhetoric with China."

As a matter of fact, the 2008 financial meltdown and subsequent global economic recession have badly hit the U.S. economy, leading to a near two-digit unemployment rate, almost stalling economic growth and sparking a new wave of protectionism.

Trade protectionism is widely regarded as short-sighted, and some U.S. officials and analysts believe that a deeper trade integration into other regions could help the United States create more jobs and improve its competitiveness.

The Chinese government has repeatedly asked the United States to stop treating it as a non-market economy. Until September 2011, 81 countries including Russia, Brazil, Australia and Switzerland had recognized China's full market economy status.

According to World Trade Organization (WTO) rules, China, as a WTO member, will be automatically granted the full market economy status in 2016.

China has also urged the United States to abide by its commitment against protectionism and maintain a free, open and just international trade environment.