Metal Anti-Dumping Cases Take a Strange Turn

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We have long reported on anti-dumping cases involving metal products. In fact, some of the cases we have covered the longest (over two years) have made some new news but not for the reasons that many of you will guess. Most anti-dumping cases that make the news involve the facts of a case¦.a group of producers, steel union workers or some other “harmed industry files an anti-dumping case claiming goods from a certain market or country have been “dumped. The ITC (International Trade Commission) investigates and some sort of duty or countervailing duty gets applied to a particular HTS code. The most recent newsworthy stories involving metals include OCTG and line pipe from China.

But now we have an entirely different issue coming to the fore and one that will surely heighten trade tensions. That issue involves the willful attempt on the part of overseas suppliers to transship or create other illicit means of moving goods ordinarily subject to these new countervailing or anti-dumping duties via a different manner to avoid the duties. According to this press release issued by The Coalition for Enforcement of Antidumping and Countervailing Duty Orders comprised of steel wire products, steel nails, steel wire garment hangers and uncovered mattress innerspring manufacturers, “These US industries have developed compelling evidence detailing how certain foreign manufacturers are evading duties. In some cases, they are shipping these products to the US via third countries and then falsely designating it as the country of origin to evade duties, a practice termed as “transshipment. In other cases, an inconsequential modification is made to the product in third countries to avoid the duties. In yet other situations, false labels displaying a different country of origin are placed on shipments of products actually made in China.

Having worked for a rogue trader in another life, I can dream up a variety of ways in which Chinese manufacturers could circumvent the ITC ruling. A trickier way to create such a scheme involves establishing a company in an export trade free zone (my personal favorite would be Singapore). Goods then ship from China to Singapore where the products likely undergo additional processing (this could be something as simple as oiling the innersprings), whereby the goods go through a re-packaging and labeling process when it leaves the country as “product of Singapore.”  This scenario sounds plausible.

According to Panjiva, a website with global sourcing tools which allow for trend spotting, the bulk of imports this past twelve months for uncovered innerspring units still came from China which would suggest these Chinese exporters did not seek to avoid the duty. But in all fairness, Panjiva data does suggest that China market share has declined while the market share for the Philippines and Canada has increased.

Powered by Panjiva Trends

In the above referenced chart, 182 shipments came from China, 8 came from the Philippines, 5 came from Canada and 3 came from Hong Kong. For the other products, according to Panjiva data, it appears to refute the claims made by the coalition. But please don’t take our word for it, check out Panjiva trends and type in “steel nails “steel wire or “carbon steel threaded rod and see for yourself!

–Lisa Reisman

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