China has been the number one target of antidumping actions filed by the U.S. Commerce Department on behalf of various domestic industries. One reason for this special status is because China is one of the world’s lowest cost producers. Because of the cost structure of its industries and economy, as well as the fact that it tends to manufacture products at the low end of the quality scale, it is able to sell a wide range of products for lower prices than most competitors. Furthermore, because it is classified as a nonmarket economy, special rules must be used to determine the cost of production. It is unlikely that the frequency of antidumping action will decline in the near future. Indeed, because the antidumping laws are becoming more …show more content…
In order to take such action, the government must prove that dumping is taking place, calculate the extent of it (how much lower the export price is compared to the exporter’s home market price), and show that dumping is actually causing material injury.
Antidumping laws, which punish foreign producers for selling their products in domestic markets at low prices, have been in existence for decades. Since the finalization of the Uruguay Round of GATT they have taken on increased importance, and the GATT agreement included an antidumping provision to which all signatories must adhere. Before the recent GATT agreement was concluded, only about 40 countries had antidumping provisions in their domestic laws.
After the Uruguay Round, more than 120 countries agreed to adopt and enforce the GATT antidumping laws. In the past few years, China has been the most frequent target of antidumping actions initiated in the United States.
This paper begins with an overview on China’s economic trade since the accession to WTO followed by an examination of how US has been responding to some Chinese imports utilizing trade defense by looking at China as anti-dumping target and some recent case studies involving antidumping actions initiated in the USA against China and attempt to determine what the frequent exercise of the antidumping laws might mean for the future. The paper concludes with a brief commentary and recommendations.
In 2001, China had the 6th largest
businesses importing manufacturing items it is sending a strong signal to the U.S. worker that the value is put on lower wage rather than the domestic skills and investing in the U.S. economy. Even though we are discussing the manufacturing of trade there are other areas that are affected in our daily lives such as social, political, environmental to name a few. There is a need for balance so everyone has a fair-trading field and not have one country dominate over the smaller or weaker country. A perfect scenario is when U.S. Senator Steve Daines brought forth the “Obama administration's decision to increase the costs of production for Montana companies by excluding many Generalized System of Preferences countries from duty relief on exports of backpacks, luggage and other related travel goods.” (Daines. S., 2016). For there to be a fair-trading field all countries need to be on equal ground which presents a chance for becoming
economies of both nations. This problem the United States must face is whether it ought
4. During 2007, the United States and Japan announced possible limits on Chinese imports through higher tariff rates on Chinese products. To avoid these limits, China would have to
According to Free Trade Organization, Dan Ikenson, policy analyst, claims “Few trade policies engender more bitterness and international ill will than the U.S. antidumping law. For many years, that law has been the weapon of choice among domestic producers seeking to quell import competition.”(zeroing, April 27, 2004)
Why doesn’t the U.S. simply restrict all goods coming in from China? Why can’t the U.S. just minimize the amount of imports coming in from all other countries?
Tariffs are perhaps the most common way to restrict, or at least slightly discourage, foreign imports.
The countries involved in the free trade agreement are China, Japan, Korea, US, Germany, Thailand and Malaysia. Majority of the countries
Since 1897, the U.S. effectively has had antidumping laws on the books, and these laws have enabled the U.S. government to punish firms in other countries that send subsidized exports to the U.S. which is Countervailing Duty Law of 1897, 19 U.S.C. 1303 U.S. In addition, the Antidumping Act of 1921, Congress loosened the requirements to permit federal action to keep out foreign products not only if foreign companies engaged in predatory pricing, but merely if their products were deemed to be priced lower than similar American products, regardless of whether predatory pricing was an issue. Antidumping law views such imports as being sold at less than
In our quickly expanding global economy, how states execute trade is more important than ever. Global organizations like the International Monetary Fund are established to help the states trade and regulate trade currencies. These global organizations are not always efficient, and can lead to imbalances in trade currency. “For more than a decade, the U.S. and other countries castigated China for its currency policy, saying the yuan’s level gave the country’s exporters an unfair advantage at the expense of its trading partners (Talley 1).” Since free trade always seems to result in trade deficits that are detrimental to the United States, the discussion should center on correcting the trade imbalance in an effort to have these free trade treaties fairer for all sides by imposing tariffs on China.
(+)Most-favored-nation trade status started in the United States as a version of the European preferential trade system. The Carter Administration first granted most-favored-nation trading status to China in 1980, following the historic efforts of President Nixon during the 1970’s to restore diplomatic ties. Historically, a significant
According to the case, because of the some unofficial speculations of using hazardous material in Xia's goods, that are manufactured in China, Brazil banned them to be imported to their country, until further investigation and tests, that were being performed to examine the health risks. Because of fear of other countries negligence and ban on the Chinese product, country took this issue in the WTO to be resolved.
In my opinion, the first reason is to protect the safety of its consumers. If the imported products are not quality products and government feels it is a threat to its people, it may impose
According to the World Trade Organization, or WTO, dumping occurs when a foreign corporation sells a product at a price that is less than the corporation sells it in its own country (Boyes, 2012, p. 170). As a consumer, I am well aware of the economy and I am always looking for products at a good price; however, when it comes to dumping, there are both advantages and disadvantages. The advantage is when a country sells products they manufacture at a lower price, it does provide employment for residents of their country; however, the company must take a loss on the production of a product in order to boost their advantage in that particular market. Further, dumping can be used as a way to take over a market in another country, attempting to put the
“Without U.S.-imposed tariffs on Chinese-made tires, for example, U.S. tire producers might be at a competitive price disadvantage. Labor costs in the Chinese tire industry are far less than U.S. tire industry labor costs. Tariffs on Chinese-made tires help to eliminate their price advantage over U.S.-made tires, thus helping to prevent thousands of U.S tire employees from being laid off (“Do Tariffs protect...”). Fortunately or not, we can draw upon real world examples and years of expert analysis. “Take for example the ‘safeguard’ tariffs imposed by the Obama administration in September 2009 on tire imports from China. According to a study by the Peterson Institute for International Economics, this measure saved a maximum of 1,200 jobs, but the ‘cost per job saved was at least $900,000 in that year’” (“Do Tariffs
On July 7, 1979, the governments of the United States and China signed the People’s Republic of China Trade Relations Agreement. This agreement basis is to “further economic and trade relations between both countries on the basis of the principles of equality and mutual benefit as well as nondiscriminatory treatment” (United States Department of Commerce ). Trade agreements are between governments on imports or export products they have an agreement to trade on. Part of the agreement will be what type of tariff if any will be used. The three types of trade agreements are unilateral, bilateral and multi-lateral. Unilateral is one countries restrictions and no others agree. Bi-lateral is agreed upon by two countries and multi-lateral is between three countries. Not all are easy to obtain but the US does have several bilateral trade agreements (Amadeo, 2014). The agreement between the governments of the United States and China is considered to be a Bi-lateral agreement. With this agreement there are several types of tariffs that can be used and is determined by the product.