PPG Industries v. United States

Section 1303 of the Tariff Act of 1930 required the United States (defendant) to impose countervailing duties on goods imported from a foreign nation that offered producers a “bounty or grant,” including some domestic subsidies. In 1979, Congress passed new law implementing the General Agreement on Tariffs and Trade (GATT), adding § 1677(5), which defined domestic subsidies subject to duties as those directed to specific enterprises or industries. Consistent with § 1677(5), the International Trade Administration (ITA) interpreted § 1303 to mean that countervailing duties should be imposed only if subsidies were directed to specific enterprises or industries. The ITA considered whether the terms of a subsidy targeted specific industries or whether the subsidy was in practice given to a limited range of firms. The Mexican government (Mexico) operated a fund known as Fideicomiso para la Cobertura de Riesgos Cambiarios (FICORCA). FICORCA allowed eligible firms to obtain foreign currency to repay debt at a guaranteed rate. Mexico also sold natural gas to industrial users at a price below the world market price. PPG Industries, Inc. (PPG) (plaintiff) argued that FICORCA and Mexican gas pricing subsidized Mexican float-glass producers and required countervailing duties. The ITA found that the float-glass companies had not used FICORCA and had paid the same price for gas as other industries, requiring no duties. PPG appealed to the United States Court of International Trade, arguing that Congress intended bounty or grant to mean all subsidies that allowed foreign goods to be sold at lower prices in the United States. PPG argued that the ITA’s reading made foreign goods less likely to be subject to duties if the foreign nation made subsidies more widely available, an absurd result. Alternatively, PPG argued that the ITA’s specificity test was satisfied if recipients of subsidies were identifiable. The court upheld the ITA. On appeal to the Federal Circuit, PPG argued that Mexican natural-gas pricing benefitted energy-intensive industries specifically, including float-glass producers.