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For Immediate Release: February 20, 2008
Contact: Brittany Eck   (202) 482-3809


WASHINGTON – The U.S. Department of Commerce today announced its affirmative preliminary determination in the countervailing duty investigation on raw flexible magnets from the People's Republic of China. Commerce preliminarily determined that Chinese producers/exporters received net countervailable subsidies of 70.41 percent.

“Subsidization of industries gives Chinese exporters an unjust advantage and forces American manufacturers to compete against a stacked deck,” said Assistant Secretary for Import Administration David Spooner. “In order to achieve a strong and fair trading relationship with our partners, the Bush Administration will remain committed to aggressively enforcing U.S. trade laws.”

Raw flexible magnets are generally relatively thin, polymer bonded magnetic materials characterized by their flexibility and ease of machinability, which make them ideal for use as “refrigerator magnets.” Raw flexible magnets are also used in a broad range of domestic, commercial, and industrial applications. The petitioner for these investigations is Magnum Magnetics Corporation ( Marietta, Ohio).

The Department of Commerce is charged with the enforcement of U.S. trade remedy laws including enforcing our domestic anti-subsidy law, the CVD law. Anti-dumping trade rules and countervailing duty trade rules are both tools that are sanctioned by the WTO to deal with unfair pricing and subsidization of imports. Government subsides distort the free flow of goods and adversely affect American business in the global marketplace. Foreign governments subsidize industries when they provide financial assistance to benefit the production, manufacture or exportation of goods. Subsidies can take many forms, such as direct cash payments, credits against taxes, and loans at terms that do not reflect market considerations. The statute and regulations establish standards for determining when an unfair subsidy has been conferred. The amount of subsidies the foreign producer receives from the government is the basis for the subsidy rate by which the subsidy is offset or "countervailed."

The Department of Commerce has the legal authority to apply the CVD law to non-market economies. In 1984, the Department of Commerce adopted a policy of not applying the U.S. countervailing duty law to non-market economy countries. Commerce reasoned that subsidies had no measurable economic impact in the 1980’s Soviet-style economies that were then under consideration. This policy was upheld by the Court of Appeals for the Federal Circuit in the 1986 Georgetown Steel case. Since then, the antidumping law has been a commonly used instrument to address unfair trade practices.

For more information about Import Administration or for the fact sheet on today's preliminary decision, please visit .

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