The U.S. Commerce Department announced that it has made a preliminary ruling that imports of rubber bands from Asian markets like China and Thailand amount to dumping. This ruling stemmed from a petition filed this year by Alliance Rubber Co., Hot Springs, Ark., the parent company of Ad Bands Plus and the largest rubber band manufacturer in the U.S.
According to the Hot Springs Sentinel-Record, this is the company’s second successful unfair competition case against Asian competitors this year.
It’s important to note that the use of the word “dumping” here isn’t the same as what many might think of in terms of waste management and pollution. It’s more of the “dumping” of imports into the U.S. market at rates lower than market value, which damage the economy.
Due to the regulations, Chinese importers of rubber bands will have to pay a preliminary dumping rate of 27.27 percent. This rate applies to what Commerce called the “China-wide entity,” as no companies adequately showed that they were eligible for the catch-all rate.
Affected companies in Thailand exporting rubber bands into the U.S. would pay a 5.86 percent rate.
“What we’ve seen over the last several years is that rubber band manufacturers in China and Thailand seem to receive some unfair competitive advantage over us due to subsidies and dumping, basically selling at less than fair value to the U.S. market” Jason Risner, business strategy director for Alliance, told the Sentinel-Record. “It cost us our ability to grow.”
Risner added that since what he calls Alliance’s “heyday,” in the beginning of the last decade, employment and production levels are down. The breaking point was losing a major customer.
“This was kind of the straw that broke the camel’s back,” he said. “We not only lost them, we had a good idea of the price we lost them at. It was very, very apparent to us at that time that something fishy was going on. There was no way you could create a pound of rubber bands and sell them at the price that this big customer was able to get them at.”
Last year, rubber band imports from Thailand totaled an estimated $12.1 million. Chinese imports totaled about $4.9 million. This new announcement comes shortly after the Commerce Department acted to place a 126 percent duty on Chinese rubber bands, as well as cash deposits on affected rubber band imports collected by Customs and Border Protection.
Risner called these deposits “kind of like a bond,”
“Companies that are importing will have to put up that 126 percent bond,” he said. “Some companies are going to see a 6 percent dumping margin. They’ll have to put that money up, and it will be held in a bond until the margins are finalized.”
The finalization is contingent on Commerce employees going to China and Thailand and conducting audits of their rubber band manufacturers.
