Anti-dumping or Anti-China?

Introduction
While trading partners are engaged in commercial affairs,
they always keep their economic and political motives in
mind. In this way, they try to limit trade with other countries
by using non-tariff barriers. There has been an adequate usage
of these barriers by the United States of America in the past.
Many of them were imposed on China. “Dumping is the
export of a commodity at below cost or at least the sale of a
commodity at a lower price abroad than domestically.” The
United States was said to be a more persistent user of anti-
dumping to protect its domestic industries. The Chinese
exports were accused of dumping. The chosen nation, the
United States, has imposed anti-dumping cases on China
several times. As we can see in Table 1, the U.S. had initiated
50 anti-dumping cases during a period of 8 years, i.e., 1997 to
2005. Out of these 33 were the cases with affirmative
decisions.

Table 1
Country U.S. AD Cases U.S. AD Cases
Initiated with affirmative
1997-2005 decisions.
1997-2005
Brazil 9 4
UK 5 2
China 50 33
South Korea 21 11
Japan 25 12
Case Study

China was charged with 2 anti-dumping cases by the U.S. in

mid-2002. Refined brown aluminum oxide (BAO) was being
sold in the U.S. at less than fair value. The other case was
filed in April 2002 which involved lawn and garden fence
posts. They were too sold at less than fair value in the market.

While considering the case of BAO, it was observed that these

Chinese exports caused an underselling of American products.
The International Trade Corporation (ITC) said that their
material injury on American firms was very evident.
Department of Commerce (DOC) did a lot of research, which
even involved questioning a few Chinese companies, one of
them was Zibo Jinyu Abrasive Company. “In the end, the
DOC determined that Zibo Jinyu’s prices were 219% lower
than U.S. companies’ prices.” The U.S. government imposed
the duty and this anti-dumping tariff was present till 2008.

In the case of lawn and garden steel fence posts, a US

company from Ohio filed an antidumping petition to the ITC
against China. There was an increase in demand of fence
posts in the U.S. market and to take the advantage of that, the
companies tried increasing the prices but failed to achieve
what they wanted because of China. They started selling the
product at a lower price than they did in their own country
which indeed, disappointed the U.S. market. There was a
detailed investigation regarding whether there was any kind of
material injury in the domestic market. The ITC found that
during the period of 2000 and 2002, there was a sudden rise in
imports from China and it is the same period when the
demand for fence posts in the country rose. The DOC
announced an investigation in China and got a response from
3 companies. They were Shanghai BaoSteel International
Economic and Trading Corporation, Hebei Metals and
Minerals Import and Export Corporation. After a fair
investigation of their factors of production, financial
statements and most importantly, price, the DOC came to the
conclusion that they were clearly dumping their products and
were given some percentage of dumping margin, which
ranged between 1% to 17%.

Impact

The average exports to the U.S. from China and the

total U.S. anti-dumping impositions on them are shown
below:

The quantity of imports in the U.S. starts to decline

sharply and they keep on declining after anti-dumping
measures are imposed. (The value of duty levied cases
decline as a whole)

Talking about China, “the overall unit value in duty

levied cases is 10 percentage points higher than the
previous year when the case was not filed. The higher
the duty is levied, the larger the increase in unit value
is.”
Dumping of goods benefitted the U.S. customers because they
got reasonable products from other country’s imports. This
makes the market to reduce their prices. Dumped products are
cheaper than the goods in the nation to which it is being
imported. As there was an increase in competition from other
Chinese brands, it made the U.S. producers consider lowering
the price to attract the customers. Consumers will have a
larger consumer surplus because they have a great exposure to
a large supply of products at a cheap price. Some production
units in the U.S. were driven out because of foreign supplies
which made the domestic workers lose their jobs and
shareholders of the firm to loose their capital. After anti-
dumping measures were imposed, the rates came back to
original and then the customers will have to pay the initial rate
which they had to when China didn’t interfere with its
products in the U.S. markets. So, the consumers somehow
suffer because they will have to pay higher and they won’t
have access to variety which they had before. There will be
less competition for producers.

Conclusion

As it was noticeable in the decline of sale of Chinese BAO

and fence posts after anti-dumping measures were taken, it did
help to reduce excessive and unnecessary competition U.S.
producers had to face. Thinking from the point of view of
U.S. producers, it will bother them that their products of good
quality are being overtaken by cheap products from China.
The U.S. producers actually suffered a lot due to this and I
believe it was for the best that anti-dumping measures were
taken at the right time.
References
 http://www.wto.org/english/tratop_e/adp_e/adp_e.htm
 http://censtats.ensus.gov/sitc/sitc.shtml
 https://ideas.repec.org/p/nbr/nberwo/13349.html
 https://www.federalregister.gov/documents/2003/11/19/03-
28803/antidumping-duty-order-refined-brown-aluminum-oxide-
otherwise-known-as-refined-brown-artificial
 https://www.federalregister.gov/documents/2003/06/12/03-
14887/notice-of-antidumping-duty-order-lawn-and-garden-steel-
fence-posts-from-the-peoples-republic-of
 https://www.nber.org/papers/w7404
 https://www.everycrsreport.com/files/
20120521_RL33536_91c1b3df99bbfa129e30d361415b2d17c17
d41dc.pdf
 https://siteresources.worldbank.org/INTTRADERESEARCH/
Resources/544824-1272916036631/bown-global-ad-v3.0.pdf