The World Trade Organization backed China in its complaint against the U.S. use of so-called zeroing to calculate anti-dumping duties on Chinese shrimp and diamond sawblades in a case the Obama administration didn’t contest.
The WTO has ruled several times against the methodology, under which the U.S. sets the cost of a product at zero rather than the actual amount, saying it unfairly increases the amount of anti-dumping levies that must be paid. The U.S., which has already agreed to recalculate the dumping margins on the Chinese imports, said in February that it would stop using zeroing.
Dumping occurs when companies export goods at a loss, or at prices below what the products fetch in their domestic market. In most investigations, the Commerce Department averages prices for each product under review and the comparable goods in the U.S. It then compares the prices and sets duties based on the difference.
Today’s ruling by the Geneva-based WTO mirrors findings in past complaints lodged by Brazil, Canada, Ecuador, the European Union, Japan, Mexico, South Korea, Thailand and Vietnam.
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