Congresswoman Tammy Baldwin (D-WI) this week sent a letter to Obama Administration officials requesting detailed information about at least $1 billion owed to U.S. taxpayers due to inadequate enforcement of U.S. trade remedy laws.
The letter, sent to Secretary of Commerce John Bryson and U.S. Customs and Border Protection Acting Commission David Aguilar, requests a detailed response on how the failure to collect countervailing duties over the past decade has harmed Wisconsin manufacturers, and asks what Congressional action is needed to immediately correct the situation.
According to the Government Accountability Office, as of 2001, U.S. Customs and Border Protection (CBP) has been unable to collect at least $1 billion owed in anti-dumping and countervailing duties imposed to combat damaging and unfair foreign trade practices.
The report reveals that the uncollected duties are highly concentrated among a few industries and that imports from China account for more than 80 percent of the total uncollected trade duties. Along with the U.S. losing more than $1 billion in federal revenue over the past ten years, China and other countries that cheat and unfairly subsidize their industries have gotten away with circumventing U.S. trade laws.
"American manufacturers deserve our full support in combating China's relentless pattern of international trade law violations," said Congresswoman Baldwin. "I believe we must use all of the trade enforcement tools available to us to not only collect the duties owed, but ensure that American businesses and workers compete on a level playing field. Failing to collect $1 billion in trade duties over the past ten years is damaging to our manufacturing base and likely to lead to the loss of American jobs. American taxpayers deserve justice," Baldwin said.
In the paper sector alone, China provided more than $33 billion in subsidies from 2002 to 2009 and, during that period, overtook the U.S. as the world's largest producer of paper and paper products. American companies in these and other sectors rely on the countervailing duty orders in place to combat these illicit subsidies and help them keep their doors open.
Moreover, U.S. companies collectively spend millions of dollars to initiate and litigate these types of trade cases to keep illegally subsidized imports from entering the U.S. market, fully expecting positive determinations to result in funds collected by CBP.
In Wisconsin, several industries have countervailing duties in place against subsidized Chinese imports, ranging from paper to pressure pipe to wood flooring. In the pulp and paper industry, Wisconsin manufacturers that directly benefit from these tariffs include NewPage Corporation (Biron, Stevens Point, Whiting, and Wisconsin Rapids), Appleton Coated LLC (Kimberly), Felker Brothers Corp. (Marshfield), Coating Excellence International, LLC (Wrightstown), Appleton, Inc. (Appleton), Award Hardwood Floors (Wausau), and From the Forest (Weston).
When enforced, trade duties on Chinese imports can create jobs in the U.S. It's been reported that, in the past five years, more Chinese manufacturers have opened plants in the U.S. as a result of this level playing field.
Baldwin's letter is part of a larger battle she's waging against unfair trade practices by the Chinese government. This year, she introduced with Rep. Reid Ribble (R-WI) the China CHEATS Act to protect Wisconsin paper manufacturers, which was incorporated into legislation that is now law.