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trade friction: now even the kitchen sink affected

Summary: As part of CSIC’s efforts to keep buyers informed of WTO (world trade organization) rulings which could affect your sourcing, this post explains about the status of stainless steel sink imports and why China sourcing professions need to care about those products and WTO rulings.  Even if you are not in the sink industry, the trade friction could spill over into your industry. Here is the latest on the situation.

First some good news

As China is now a full member of the World Trade Organization (WTO) trade disputes are mediated
by the WTO. This is a large step towards “rule of law” at a global level and helps to reduce not only trade barriers but also prevents trade friction turning into trade wars.

Now the reality

When one nation brings a case to the WTO court, it is not uncommon for the defending party to
raise countersuits on other products. Sometimes the act of raising a countersuit results in the two sides “settling out of court”. In cases that do go to the WTO mediation, it is very common for the losing nation to strike back in other product categories.

For a case study, check out the blog post Chicken and Tires. Tit for Tat at the WTO.

The article “US to continue probes into stainless steel sinks from China” has the following
highlights:

A US federal trade panel determined Friday the US industry was “materially injured” by importing stainless steel sinks. The US International Trade Commission (USITC) voted unanimously in the affirmative in the case, which was petitioned by Elkay Manufacturing Company based in Illinois.

The USITC’s move would allow the US Department of Commerce to continue its investigations on imports of these products. The preliminary countervailing duty (CVD) determination is due around May 25, 2012, while the anti-dumping (AD) one is due around August 6, 2012.

These investigations, started on March 22 by the Commerce, intend to impose anti-dumping duty ranging from 22. 81 percent to 76.53 percent and countervailing duty at above 2 percent.

The United States consumed about 303.9 million dollars of stainless steel sinks in 2011, among which nearly 119.1 million U. S. dollars of products were from China, according to the USITC.

If the US governments moves forward with the penalties, we can expect the Chinese will be calling for counter measures. Let’s hope this politically motivated sabre rattling over stainless steel sinks doesn’t spill over into other industries and ignite a trade war.

We believe a full scale trade war is highly unlikely, but “tit for tat” sanctions are to be expecte

How to stay “in the know”

To help readers keep a pulse on potential and active WTO cases, sign up for this RSS feed as we will blog about any cases that have the potential to impact the China sourcing profession.

 

Wishing you successful China sourcing!

About the blogger

Mike Bellamy is an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center (www.ChinaSourcingInfo.org). He is also the author of, “The Essential Reference Guide to China Sourcing” (chinasourcinginfo.org/book) and founder of PassageMaker Sourcing Solutions (www.PSSchina.com)

 

 

 



Mike Bellamy

Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center (www.ChinaSourcingInfo.org). Author of “The Essential Reference Guide to China Sourcing” and founder of PassageMaker Sourcing Solutions. Mike is co-founder of CSA, the China Sourcing Academy.


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