U.S. revokes Russia’s status as a market economy

Move will affect how the Department of Commerce handles Russia in future antidumping investigations

WASHINGTON, D.C. — The United States Department of Commerce said this past week that it is revoking Russia’s status as a market economy, a move that will affect how Russia is handled in antidumping proceedings.

The DOC said the decision allows the U.S. government to apply the full force of the U.S. antidumping law in addressing market distortions caused by increasing Russian government interference in its economy.

The decision follows an in-depth analysis in which the DOC found that extensive government involvement in the economy has led to distorted prices and costs in Russia. The DOC said that such prices and costs do not accurately reflect whether Russian companies are fairly pricing imports into the United States.

Moving forward, the DOC will apply an alternative methodology to calculate antidumping duties on imports from Russia, using market-based prices and costs from a country with a comparable level of economic development that produces similar goods.

This is similar to the government’s use of India as a surrogate country in its 2003 investigation of Chinese wooden bedroom furniture imports, as China was considered a non-market economy.

The DOC said that revoking Russia’s status as a non-market economy will allow it to more effectively address Russian unfair trade practices that harm U.S. manufacturers.

Based on a balanced evaluation of facts and in line with U.S. law, this decision will ensure that Commerce’s dumping calculations reflect economic realities on the ground and that U.S. industries get the relief from unfair imports that they are entitled to under the law,” the DOC said. “This decision is an important acknowledgement of the rise of Russian state-influence in their economy, which puts U.S. industries at a disadvantage when trying to compete globally.”

While Russia is not a major producer of furniture shipped to the U.S. market, the move could affect raw materials produced by Russia — such as certain hardwoods — that could later become the target of an antidumping investigation.

The DOC said that its market economy and non-market economy determinations are based on a “thorough evaluation of specific criteria set out in U.S. law such as currency convertibility, how wages are determined, the climate for foreign investment, government controls of the means of production, government control over firm business decisions and any other appropriate considerations.”

The DOC said its decision was based on extensive backtracking in these areas, notably since the invasion of Ukraine. It said its determination is based on an “in-depth analysis of research from impartial, third-party sources.”

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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