Michael Martina and David Brunnstrom
WASHINGTON (Reuters) – U.S. companies said Wednesday that the U.S. needs stricter legislation to enforce trade laws and ensure criminal prosecution of Chinese government-subsidized companies that circumvent U.S. tariffs by transporting goods through third countries.
Executives from mid-sized industrial companies — manufacturers of steel pipes, kitchen cabinets and hangers — said at an event by lawmakers on Capitol Hill that the U.S. has lost losses in tariff revenue for years, and U.S. companies have been rejected by Chinese companies to exploit trade rules.
They say even if U.S. companies win trade cases, limited funding for law enforcement means Chinese companies can easily find loopholes.
“We were forced to close factories, reduce jobs and reduce investment,” said Tom Muth, executive vice president of Zekelman Industries, an independent pipeline and pipe manufacturer.
“These imports are not directly from China, but indirectly from China. They come from countries such as Oman, Thailand, Vietnam and the UAE. These are the main importers of subsidies and dumping hot steel from China.”
Milton Magnus, CEO of M&B Metal Products Company, Inc., who has produced wire hangers for the dry cleaning and textile industries, said his 82-year-old family business has been battling illegal trade practices in China for 22 years.
Magnus told lawmakers that included Republican Representative Ashley Hinson and Democratic ranking member Raja Krishnamoorthi, whose company won anti-dumping cases against China in 2008, but had little relief.
“Before the ink dry on the order, China had already evaded orders by crossing the country through other countries, jumping to the country, changing its name, transferring goods, just to maintain its lead,” Magnus said.
Executives favor a bipartisan bill that would increase prosecution of tax evasion and other trade costs, called the Protection of U.S. industry and labor from international trade crimes bill.
China’s embassy in Washington did not respond to requests for comment on the allegations of executives.
President Donald Trump has launched a new tariff war with China, as well as Mexico and Canada, so the reintroduction of the bill failed to be promoted to law in the last Congress.
In a speech to Congress on Tuesday, Trump said the United States has been torn apart by almost every country on the planet for decades.
