NEW YORK The American Wire Producers Association (AWPA) and leaders in the domestic wire industry met with members of the House of Representatives on Capitol Hill to urge Congress to better enforce existing trade laws, which critics say importers have been circumnavigating for years.
"Customs is not doing their job, to be blunt," John Martin III, chief executive officer of Mar-Mac Wire Inc., McBee, S.C., and president of the AWPA, told AMM on the sidelines of the Wire and Wire Products Caucus briefing June 26. "They have all the tools, they have all the powers; theyre just not using them."
Avoidance of import duties is widespread in the wire sector, industry leaders told legislators. Importers who have been slapped with anti-dumping or countervailing duties, particularly players from China, routinely avoid duties by shipping their products via third-party countries or by making minor modifications to products so they do not technically qualify as imports subject to duties, AWPA members said.
"China routinely breaks the rules that it has agreed to with other nations," Rep. Billy Long (R., Mo.) said. "China currently falsifies its documents and transships its products by sending them through third parties in order to avoid the ... duty that they owe."
Caucus participants primarily discussed H.R.1440, the Enforcing Orders and Reducing Customs Evasion (Enforce) Act, which has been referred to the House Ways and Means Committee. The legislation, which has 42 cosponsors, would reform U.S. Customs and Border Protections oversight of imports so Customs could better detect unfairly traded imports that illegally circumvent duties.
"We need you to enthusiastically support the Enforce Act ... (to protect) American jobs fair and square against illegal foreign activities," said Rep. Jim Cooper (D., Tenn.). "These rascals are trying to evade these duties. It is wrong. If we have a law, we need to enforce it. This is not complicated."
Chinese exporters of wire clothing hangers, for example, may add a cardboard strip to their products to exempt them from dumping duties, market sources said.
Likewise, sources said there is evidence that some products are being shipped via other countries in order to avoid duties. Chinas shipments of prestressed concrete (PC) strand, for example, largely halted after the U.S. industry successfully filed a trade case in 2009, but shortly thereafter imports of PC strand began arriving in the United States from Malaysia, and there was strong evidence of circumvention on the part of the Chinese, said H.O. Woltz III, chief executive officer of Insteel Industries Inc., Mt. Airy, N.C.
The Enforce Act would require Customs to investigate claims of duty evasion and allocate resources to stop the import of unfairly traded items. Provisions in the bill also would improve the accountability and transparency of Customs actions, Amy DeArmond, government policy and legal affairs strategist for Leggett & Platt Inc., Carthage, Mo., told AMM.
Several speakers also noted that Chinese steel companies routinely receive government subsidies to maintain and expand steel production, giving exporters to the United States an unfair advantage.
Woltz said that on a visit to China, a steel executive disclosed that the Chinese government was giving him $14 million to relocate and modernize his facilities.
Tim Selhorst, president and chief executive officer of American Spring Wire Inc., Bedford Heights, Ohio, told AMM on the sidelines of the caucus that he talked to Chinese executives who were incredulous that Selhorst was paying for his own die casting machine without government assistance. "A guy like me cant compete with Chinese companies that are getting subsidies," Selhorst said. "Its scary."
The Enforce Act is likely to reach the House floor for a vote in the fall, industry sources said.