China evades U.S. duties by exporting via third nations

The U.S. Coalition for Enforcement of Antidumping and Countervailing Duty Orders said it had developed “compelling evidence how certain foreign manufacturers (in China) are evading duties.”

In some cases, it said, they shipped the products via third countries and then “falsely designating it as the country of origin to evade the duties,” a practice termed transshipment, the coalition charged in a statement. “In other cases, an inconsequential modification is made to the product in third countries to avoid the duties (or) false labels displaying a different country of origin are placed on shipments of products actually made in China.”

The coalition named the “third countries” as Vietnam, South Korea, Malaysia, Canada and Mexico. The Hong Kong and Taiwan economies were also accused of being used by the Chinese based manufacturers to send the products to the United States in an apparent bid to evade duties.

The coalition, comprising six companies manufacturing steel wire products, said it had informed the U.S. government and lawmakers on the problem, adding that duty evasions had cost the authorities “at least US$84 million annually” and also “threatened jobs.”

“These schemes are blatant and purposeful,” said David Libla, President of Mid Continent Nail and a coalition member.

“Not only are they clear evidence of attempts to maintain an unfair advantage in the marketplace, they're also costing taxpayers millions of dollars and reducing job opportunities in this country,” he charged.

U.S. duties slapped on Chinese steel products for alleged dumping or “unfair” subsidies have been part of increasing trade tensions between the United States and China.

In the latest high profile case in December, U.S. authorities decided to impose countervailing duties of up to nearly 16 percent on imported steel pipes from China valued at US$2.6 billion in 2008.

It was the largest countervailing duty case filed against China, based on the value of trade and drew strong criticism from Beijing.

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