Japan Extends CDSOA-Related Sanctions

Japan Extends CDSOA-Related Sanctions Japan's Ministry of Economy, Trade and Industry announced it will maintain retaliatory tariffs on bearings made in the United States, extending them for another year, through September 1, 2007. These punitive tariffs on U.S. bearings -- 15% -- were approved by the World Trade Organization as punishment for the U.S. refusal to repeal the Continued Dumping and Subsidy Offset Act of 2000. Repeatedly ruled an illegal domestic business subsidy scheme under WTO rules, the WTO eventually allowed sanctions by trading partners after the U.S. Congress failed to address CDSOA repeal. The level of punitive tariffs allowed by the WTO are proportional to the duties paid by each country that is impacted by the CDSOA. The Ministry had instituted the tariffs September 1, 2005, with a yearly renewal clause. Japan's retaliatory tariffs are important because they are the first-ever trade sanctions by Japan against the United States, underscoring the intensity of the problem as seen by Japan and other trade partner countries. The European Union put retaliatory tariffs on U.S. goods in May 2006 and those tariffs will remain in place indefinitely. Essentially, the CDSOA instructed U.S. Customs to change how it handles duties and tariffs. Instead of going into the general fund, duties and tariffs collected on items judged to be sold at unfairly low prices in the U.S. ("dumped") are instead accumulated in accounts related to each specific industry sector claiming damage. Japan claims that at least 30% of the duties collected are on Japanese-produced goods, and bearings are disproportionately hard-hit. 15% retaliatory duties on the following products from the U.S.: HS code 848210000 - Ball bearings HS code 848220000 - Tapered roller bearings, including cone and tapered roller assemblies HS code 848240000 - Needle roller bearings HS code 848250000 - Other cylindrical roller bearings HS code 848280000 - Roller bearings, including combined ball/roller bearings, other than subheadings Nos. 8482.20 to 8482.50 HS code 848291000 - Balls, needles and rollers of ball or roller bearings HS code 848299000 - Parts of ball or roller bearings, other than balls, needles and rollers along with three types of steel, navigational instruments, machinery accessories, printing machines, forklifts, and industrial belting. The CDSOA is often referred to as the "Byrd Amendment" after its 11th-hour sponsor, Senator Robert Byrd. In February 2006, Congress voted to end the CDSOA as of October 2007, but its end is by no means assured. Several politicians have indicated their intention to revive the CDSOA scheme under one or several different guises.