Chinese firms dumping plastic ribbons and bows at high margins in US

08 August 2018 3 min. read
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Preliminary determinations from the US Department of Commerce and International Trade Commission have found that Chinese plastic ribbon producers are dumping their products in the US at margins of between 45.16% and 370.04%. A preliminary determination also found that the firms were unlawfully being subsidized by the Chinese government at rates of 12.81% to 94.67% of product value.

In December of last year, Pennsylvania-based decorative ribbon manufacturer Berwick Offray filed a petition with the U.S. Department of Commerce and the US International Trade Commission saying that imports of plastic ribbons from China are being sold in the US at dumped (artificially low) prices. Firms use the dumping tactic in order to destroy competition in a region, allowing them to then gain a monopoly afterwards and boost prices.

The petition further stated that the dumped prices were facilitated by Chinese government subsidies prohibited by US and international law. The December petition alleged dumping margins as high as 370%.

D.C.-based law firm Wiley Rein LLP worked with international economics and trade consulting firms International Economic Research LLC and Capital Trade Inc to file the petition on behalf of Berwick Offray. Capital Trade supports law firms with expert economic analysis, with a specialization in antidumping, countervailing duty, and intellectual property rights.China dumping plastic ribbons and bows at high margins in USOn July 30, the US Department of Commerce made a preliminary determination in the investigation that Chinese producers were dumping plastic ribbons and bows at margins of between 45.16% to 370.04%. Before this, the Department had also found that Chinese ribbon producers were being illegally subsidized at rates of 12.81% - 94.67% of product value.

Earlier, the US International Trade Commission determined that there was reasonable indication that the US plastic ribbon industry was being “materially injured or threatened with material injury due to imports of plastic decorative ribbons from China.”

The investigation is scheduled to conclude in October, though it can be extended to December. The General Agreement on Tariffs and Trade outlines that dumping investigations should take a maximum of 12 months to conclude.

Until the Department of Commerce’s final determination, provisional antidumping and countervailing duties will be collected based on the preliminary margins. Countervailing duties are collected to neutralize the anti-competitive effects of foreign subsidized goods.

"We are pleased with the Department's preliminary determination as it confirms the substantial level of dumping that is occurring in the U.S. market," said Daniel B. Pickard, counsel to Berwick Offray and a partner in the International Trade Practice at Wiley Rein LLP. "After this determination, we are one step closer to restoring a level playing field and bringing relief to a U.S. industry that has been injured by dumped and subsidized imports of Chinese producers."

China has been the target of many antidumping complaints from US firms over the past 20 years, with many arising in response to Chinese steel and metal imports. Earlier this year, Chinese aluminium foil producer Jiangsu Zhongji Lamination Materials was hit with a countervailing duty of 17.14% and an anti-dumping duty of 37.99%.

President Trump imposed a broad tariff of 25% on steel imports and 10% tariff on aluminum imports from China and other countries earlier this year.