What Exactly is Anti-Dumping and Countervailing?
Anti-dumping (ADD) laws that are put into place, seek to prevent products, like metal products manufactured overseas, from being sold by firms in the U.S. at “less than fair value”. Countervailing (CVD) duties seek to offset the subsidies that foreign governments provide for some exporting firms by imposing duties on the goods and services these firms export to the U.S. Anti-dumping laws and countervailing duty laws are considered by some to be somewhat arbitrary. However, the World Trade Organization (WTO) has a straightforward definition of dumping: “If a company exports a product at a price lower than the price it normally charges in its own home market, it is said to be “dumping” the product.” The overall mantra for these laws and duties is to achieve “fair trade” vs. “free trade”. To learn the role of anti-dumping and its effect, particularly when it comes to metal products like aluminum and steel, it is informative to see the effect anti-dumping policies have had here in the USA.
Recent Anti-Dumping Policies Between U.S and China
The Trade Preferences Protection Act of 2015, signed by then-President Obama, the first major customs law enacted in over 20 years, loosened the manner in how the constructed value of goods could be calculated. This Act was a result of several American steel companies claiming that low priced metal product imports from China were priced below fair market value. The United States government responded by imposing a duty on any metal from China. The U.S. has recently revisited those anti-dumping laws as the 2015 laws were about to end.
It’s Not Just China
ADD and CVD orders impact a wide range of products and from a large number of countries. Though China has mostly been in the news recently, it is interesting to note that Vietnam, Korea, Turkey, Taiwan, and Indonesia are countries that have also had notable increases in ADD/CVD orders in the past five (5) years. Orders also regularly include European countries such as the UK, France, and Germany.
Understanding the Process of Anti-Dumping Duties
China is a significant source of imported metal product to the American market; therefore, the balance between maintaining an international trade relationship while imposing ADD/CVD orders is, as you may already assume, a delicate issue.
The dumping process begins with imported goods or components (as is the current case with component aluminum extrusions) being priced below market value, or below the price that a same or similar item would be priced in China. These prices tend to be much lower than American counterparts, undermining the market and competition. Anti-dumping complaints are initiated by domestic companies with sufficient evidence to persuade the government to launch an investigation, and, if warranted, to impose anti-dumping duties. The evidence includes quantities, prices of imported goods, tax codes of the imported metal products, other competitors, and the demonstrated impact that the product has on domestic industries.
Current Anti-Dumping Duties on Imported Metals
Recently the United States has levied duties on imported aluminum foil stemming from China. This has inadvertently caused tension between these two economies, with the Commerce Department imposing a possible import duty between 96.81% and 162.24%, with the department noting that the goods were sold at unfairly low prices; and it was undercutting the domestic markets. In a rebuttal, China summoned mandates by the World Trade Organization, calling on the United States to fulfill its international obligations of trade.
Another product that has come under the anti-dumping microscope is aluminum extrusion components.
In these instances, the metal products and components we produce on behalf of our customers are moved to South Korea which has no ADD/CVD orders in place.
How ITI Manufacturing Helps U.S Companies
ITI Manufacturing is intimately familiar with China and national markets in the manufacturing and processing of various product materials, such as metals, plastics, wood products, medical, and electronics. For nearly 45 years, we have managed the manufacturing, production, and international logistics of our US-based customer’s products with remarkable success.
We understand the intricacies of China manufacturing and international logistics from our deep experience. We understand the layers of complexity when it comes to manufacturing metal products overseas, as well as plastics, wood, electronics, and cut and sewn products, etc. Because of our experience, we’ve been able to streamline the process for hundreds of US manufacturing companies, working with factories specialized in the production of steel including castings, forging, and injection molding.
To see how we can help manufacture your metal products, or any other great product, connect with us today. Call ITI Manufacturing at 888-574-6823.