National Clothesline

Wire hangers imported from Vietnam would face import duties of up to 21 percent following a U.S. Department of Commerce decision in late May.

The department determined the Vietnamese hanger manufacturers have received subsidies from the government of Vietnam that allow them to make and sell their hangers for less than the actual cost of production. In particular, the department found that the manufacturers received rent and tax exemptions from the Vietnamese government the benefited the operation of their facilities.

A final ruling on the tariff is scheduled for October. The International Trade Commission (ITC) would then rule on it the following month before a final order is issued.

In the meantime, U.S. Customs and Border Protection will collect cash deposits ranging from 11 to 21 percent on hangers coming into the U.S. from Vietnam. The actual rate depends on which company manufactured the hangers. Two companies were assigned the lower 11 percent rate and three were assigned the maximum 21 percent. All other Vietnamese sources would pay 16 percent.

News of the import duties began filtering through the U.S. media in early June with reports warning consumers that drycleaning prices would be going up because of the higher cost of hangers.

“If your weekly drycleaning bill already has you cringing, brace yourself for more pain,” CNN said. “As soon as your next pickup, prices may be higher.” One hanger supplier told CNN his costs would nearly double — from five cents to nine cents per hanger.

The story spread across the nation in television and newspaper reports which, if nothing else, should leave consumers expecting an increase in drycleaning prices.

The Department of Commerce action was just the latest volley in a trade war over hangers that has been going on since 2002 when several U.S. hanger manufacturers petitioned for a tariff on Chinese hangers, saying that the imports were undercutting the market for U.S.-based manufacturers, depressing prices and adversely affecting their businesses.

That led to an ITC investigation that found Chinese-made hangers coming in to the U.S. at an annualized rate of 540 million, but the request for a tariff on those hangers was turned down at that time. Hanger imports from China continued to grow, reaching one billion in 2005 and hitting 2.7 billion two years later.

Wholesale hanger prices fell, too. The Commerce Department said the one billion hangers imported in 2005 had a value of $31.4 million, an average of about 3 cents per hanger. The 2.7 billion hangers imported in 2007 had a value of $68.5 million, making the average cost per hanger down to 2.5 cents.

Meanwhile, domestic hanger production fell from 2.2 billion hangers in 2004 to 6.9 million in 2006. In the same period, total U.S. consumption of hangers fell a relatively smaller amount, from 3.2 billion to 2.9 billion, indicating that Chinese-made hangers had all but overtaken the market.

During the same period, U.S. hanger manufacturers were falling by the wayside. In 2008, the one remaining U.S. hanger maker, M&B Metal Products, again appealed to the Commerce Department for help and this time got it in the form of the tariffs imposed on Chinese-made hangers in 2008. Tariffs of 33 percent to 221 percent were imposed on Chinese-made hangers.

Soon thereafter imports from Vietnam and other Asian nations began to swell. The Commerce Department said the value of hangers imported from Vietnam grew from $4.5 million in 2009 to just under $40 million last year.

Meanwhile, a coalition of U.S. manufacturers was complaining that the tariff was being circumvented by transshipping — hangers made in China were being shipped to other countries and being represented as exports from those countries before being sent to the U.S.

The Coalition for Enforcement of Antidumping and Countervailing duties, which includes M&B and five other U.S. firms involved in manufacturing steel nails, innerspring units and carbon threaded rod, called on Congress, the Department of Commerce, and U.S. Customs and Border Protection for stronger enforcement of existing antidumping orders.

Then late last year M&B joined with Innovative Fabrication/Indy Hanger of Indianapolis, and U.S. Hanger Co. of Gardena, CA, in appealing to the Commerce Department to investigate hangers coming into the U.S. from Vietnam and Taiwan.

In its initial response, the Commerce Department noted import statistics that show a marked increase in hangers coming from both countries.

The recent department ruling concerns only the government-subsidized production of hangers in Vietnam. Investigation of the allegations of dumping is continuing, thus additional duties could be imposed on Vietnamese hangers and new duties imposed on hangers imported from Taiwan.



		National Clothesline


	Hanger imports hit with another tariff


Wire hangers imported from Vietnam would face import duties of up to 21 percent following a U.S. Department of Commerce decision in late May. The department determined the Vietnamese hanger manufacturers have received subsidies from the government of Vietnam that allow them to make and sell their hangers for less than the actual cost of production. In particular, the department found that the manufacturers received rent and tax exemptions from the Vietnamese government the benefited the operation of their facilities. A final ruling on the tariff is scheduled for October. The International Trade Commission (ITC) would then rule on it the following month before a final order is issued. In the meantime, U.S. Customs and Border Protection will collect cash deposits ranging from 11 to 21 percent on hangers coming into the U.S. from Vietnam. The actual rate depends on which company manufactured the hangers. Two companies were assigned the lower 11 percent rate and three were assigned the maximum 21 percent. All other Vietnamese sources would pay 16 percent. News of the import duties began filtering through the U.S. media in early June with reports warning consumers that drycleaning prices would be going up because of the higher cost of hangers. “If your weekly drycleaning bill already has you cringing, brace yourself for more pain,” CNN said. “As soon as your next pickup, prices may be higher.” One hanger supplier told CNN his costs would nearly double — from five cents to nine cents per hanger. The story spread across the nation in television and newspaper reports which, if nothing else, should leave consumers expecting an increase in drycleaning prices. The Department of Commerce action was just the latest volley in a trade war over hangers that has been going on since 2002 when several U.S. hanger manufacturers petitioned for a tariff on Chinese hangers, saying that the imports were undercutting the market for U.S.-based manufacturers, depressing prices and adversely affecting their businesses. That led to an ITC investigation that found Chinese-made hangers coming in to the U.S. at an annualized rate of 540 million, but the request for a tariff on those hangers was turned down at that time. Hanger imports from China continued to grow, reaching one billion in 2005 and hitting 2.7 billion two years later. Wholesale hanger prices fell, too. The Commerce Department said the one billion hangers imported in 2005 had a value of $31.4 million, an average of about 3 cents per hanger. The 2.7 billion hangers imported in 2007 had a value of $68.5 million, making the average cost per hanger down to 2.5 cents. Meanwhile, domestic hanger production fell from 2.2 billion hangers in 2004 to 6.9 million in 2006. In the same period, total U.S. consumption of hangers fell a relatively smaller amount, from 3.2 billion to 2.9 billion, indicating that Chinese-made hangers had all but overtaken the market. During the same period, U.S. hanger manufacturers were falling by the wayside. In 2008, the one remaining U.S. hanger maker, M&B Metal Products, again appealed to the Commerce Department for help and this time got it in the form of the tariffs imposed on Chinese-made hangers in 2008. Tariffs of 33 percent to 221 percent were imposed on Chinese-made hangers. Soon thereafter imports from Vietnam and other Asian nations began to swell. The Commerce Department said the value of hangers imported from Vietnam grew from $4.5 million in 2009 to just under $40 million last year. Meanwhile, a coalition of U.S. manufacturers was complaining that the tariff was being circumvented by transshipping — hangers made in China were being shipped to other countries and being represented as exports from those countries before being sent to the U.S. The Coalition for Enforcement of Antidumping and Countervailing duties, which includes M&B and five other U.S. firms involved in manufacturing steel nails, innerspring units and carbon threaded rod, called on Congress, the Department of Commerce, and U.S. Customs and Border Protection for stronger enforcement of existing antidumping orders. Then late last year M&B joined with Innovative Fabrication/Indy Hanger of Indianapolis, and U.S. Hanger Co. of Gardena, CA, in appealing to the Commerce Department to investigate hangers coming into the U.S. from Vietnam and Taiwan. In its initial response, the Commerce Department noted import statistics that show a marked increase in hangers coming from both countries. The recent department ruling concerns only the government-subsidized production of hangers in Vietnam. Investigation of the allegations of dumping is continuing, thus additional duties could be imposed on Vietnamese hangers and new duties imposed on hangers imported from Taiwan.