Tariffs possible for Chinese
hangers
A tariff may be imposed on garment hangers
imported from China if a recommendation by the United States International Trade Commission is followed.
The trade commission is a quasi-judicial
federal agency that provides trade expertise to the legislative
and executive branches of government, determines the impact of
imports on U.S. industries, and directs actions against unfair
trade practices, such as patent, trademark, and copyright
infringement.
The commission’s recommendation for
tariffs on hangers imported from China, announced Feb. 5, will
be forwarded to President George W. Bush who will make the
final determination.
Several U.S.-based hanger manufacturers,
including CHC Industries, M&B Metals Products Corp. and
United Wire Hanger Group petitioned the commission under a law
that applies only to Chinese-made goods. Under that law, if
imports from China are found to cause “market
disruption,” those goods may be restricted through an
annual quota or subject to an increased tariff for as long as
three years.
The petitioners alleged that rapidly
rising imports of Chinese hangers had undercut the market for
U.S.-based manufacturers, depressing prices and adversely
affecting their businesses.
The importers said falling demand for
hangers was the reason for the decline.
The five commissioners unanimously agreed
with the petitioners, announcing on Jan. 27 that hangers made
in China “are being imported into the United States in
such increased quantities or under such conditions as to cause
market disruption to the domestic producers of like or directly
competitive products.”
Although unanimous in their decision, the
commissioners differed on their recommended remedies.
Commission Chairman Deanna Tanner Okun and two other commission
members proposed that President Bush impose a three-year tariff
on imports of hangers from China. The tariff would be 25
percent in the first year, 20 percent in the second year and 15
percent in the third.
They also recommended that there be
expedited consideration of trade adjustment assistance for
firms and workers affected by the imports.
Another commissioner recommended a two
year tariff — 20 percent in the first year and 15 percent
in the second.
The toughest recommendation came from
Commissioners Stephen Koplan who called for a 30 percent tariff
for three years.
Koplan noted that market share of Chinese
imports rose from 5.1 percent in 2000 to 12.9 percent in the
first nine months of 2002.
“My proposed remedy is to return the
quantity of subject imports to their level in the year
2000,” he explained, adding that he chose 2000 as the
base year “because it preceded the rapid increase in
subject imports.”
The petition was filed under a section of
the Trade Act relating to China's accession to the World Trade
Organization. U.S. producers can obtain relief under this
provision if the commission finds that increases of imports of
Chinese products are causing market disruption for the domestic
industry.
The statute states that market disruption
"exists whenever imports of an article like or directly
competitive with an article produced by a domestic industry are
increasing rapidly, either absolutely or relatively, so as to
be a significant cause of material injury, or threat of
material injury, to the domestic industry."
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