U.S. Cracks Down on China Trade Dumping

Customs and Border Patrol moves to collect millions of dollars in unpaid commercial duties

Customs and Border Protection (CBP) officials this week moved to collect millions of dollars in unpaid anti-dumping penalties after finding that Chinese companies obscured the source of exports to the United States by shipping them through other countries.

The agency issued 10 decisions under the Enforce and Protect Act (EAPA), a year-old law that gives the government additional tools to pursue anti-dumping cases. The agency found substantial evidence that wire hangers were shipped from China through Thailand to evade the duties.

M&B Metal Products Co., the sole American producer of wire hangers, made an additional eight allegations of evasion related to shipments through Malaysia. The agency found reasonable suspicion of the importation wire hangers through evasion, describing a complex and coordinated scheme.

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“Combined, these EAPA investigations on wire hangers have resulted in CBP preventing evasion of over $33 million in unpaid antidumping duties annually,” acting Customs and Border Protection Commissioner Kevin McAleenan said in a prepared statement. “CBP continues to make trade enforcement one of our top priorities, fully utilizing all tools that Congress has provided us, such as EAPA investigative authorities provided for in the Trade Facilitation and Trade Enforcement Act. This is a tremendous example of how a strong allegation from the trade enabled CBP to stop evasion and protect American jobs.”

After conducting an on-site visit of a Thai manufacturer and reviewing trade data, the agency determined that the importer, Eastern Trading, had imported wire hangers that had been shipped from China through Thailand to evade penalties.

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Investigators found no production of wire hangers during any of the eight visits they made to facilities in Malaysia and concluded that there was a reasonable suspicion that the wire hangers had been manufactured elsewhere.

Investigators also determined that there was a reasonable suspicion that a wooden bedroom furniture importer failed to report imports as subject to the anti-dumping order and had, therefore, imported the furniture through evasion.

“In general, the Trump administration has promised better enforcement of our trade laws,” said Kevin Kearns, president of the U.S. Business and Industry Council. “This has been a point of contention in the previous two administrations, at least.”

Kearns said U.S. trade policy needs a major overhaul in order to adequately confront the challenges facing American manufacturing. But he said more aggressive enforcement of existing laws is a good start.

“Any enforcement is a good thing. Any actions that … would put offending countries and companies on notice is a good thing,” he said. “It’s a step in the right direction.”

Alan Tonelson, an economic policy analyst who favors a more aggressive confrontation with China, said that country’s unfair trade practices are well-documented.

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“Customs fraud is quite common, especially from China and especially in the furniture industry,” he said.

But Tonelson, who writes the RealityChek blog, questioned whether it is the best use of government resources considering there are more pressing trade issues.

“I haven’t seen evidence that this is a major problem for U.S. manufacturing overall,” he said.

Since the law took effect a year ago this month, Customs and Border Protection officials have initiated 14 investigations and have worked with other agencies and foreign governments to strengthen enforcement.

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