Sunday, July 29, 2007

Exchange Rates and Anti-dumping Duties

. Sunday, July 29, 2007

More protectionist rumblings targeted at China from Congress. "Passed by a vote of 20-1, the Senate Finance Committee's measure would allow U.S. companies to seek anti-dumping duties on goods from any country that maintains a "fundamentally misaligned" exchange rate after being formally cited by the United States." (hat tip Greg Mankiw).

The curious thing is that this particular measure lags real world developments; firms already seek anti-dumping duties in response to exchange rate misalignments, even without a formal cite by the U.S. government.* The legislation is relevant, however, as adding exchange rates expressly to the law will make it easier to reach a positive finding in the investigation.

*Knetter, Michael and Thomas Prusa. 2003. "Macroeconomic Factors and Antidumping Filings: Evidence from Four Countries," Journal of International Economics 61 (1): 1-17.


Exchange Rates and Anti-dumping Duties
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