A recent ruling could bring relief to domestic manufacturers of pool sanitizers who have been undercut by foreign competition.
On Sept 9, officials with the U.S. Department of Commerce determined that chlorinated isocyanurates from Asia are being sold at a less than fair value. Commerce concluded that Japan is dumping large quantities of super cheap tablets and shock on U.S. shores while shipments from China are unfairly subsidized.
As a result, tariffs could be imposed to level the playing field.
Chlorinated isos from Japan have been sold at dumping margins of 61 percent, the agency stated. That reflects the price disparity between Japanese and American-made products.
In addition, most Chinese manufacturers are benefiting from a subsidy rate of about 11 percent, enabling government-backed companies to flood the U.S. market with predatorily priced chlorine-based sanitizers, according to the report.
The federal agency began investigating allegations of unfair trade practices in September of last year to determine how much of the product is being exported and to what extent foreign manufacturers are benefitting from government assistance.
Meanwhile, the International Trade Commission is conducting its own investigation to nail down how much these imports are hurting domestic industry. If the ITC concludes that U.S. chemical makers are being hindered, then Commerce will authorize U.S. Customs and Border Protection to collect cash deposits as a way of urging Asian manufacturers into charging more for their products.
The ITC is expected to make its final determinations in October.
The swimming pool markets in Japan and China are relatively small therefore much of the chlorinated isos these countries produce is exported. Japan shipped 20,900 metric tons of the product, valued at $56,360,000, to the U.S. last year. China delivered 52,800 metric tons last year. That’s $168,611,000 worth, according to Commerce.
The investigation was spurred by a petition from Occidental Chemical Corp. and Clearon Corp., based in Dallas, TX and South Charleston, W. Va., respectively. These two manufacturers produce more than 75 percent of chlorinated isos in the U.S.
Charging exporters extra can be an effective way to stem the tide, so to speak. In 2005, Clearon filed a similar petition against China and Spain. The government ruled in Clearon’s favor.
“That made the difference between Clearon staying in business and probably going out of business,” said Charlotte Lane, a West Virginia attorney who served as an ITC commissioner at the time of the investigation.
Meanwhile, the federal government is expected to make a final ruling on a similar case involving calcium hypochlorite from China.
Atlanta-based Arch Chemicals filed a petition in December of last year alleging that China-made cal hypo is rapidly gaining global market share.
In July, Commerce established that it would charge China hefty cash deposits based on antidumping margins of 210 percent.
It will make its final determination in November. ITC will follow with its ruling in January.
China has shipped $8.1 million worth of cal hypo last year.
In both cases, several Japanese and Chinese manufacturers refused to cooperate with the investigation and could be penalized with steeper tariffs.