Boeing isn’t the only company seeking heavy tariffs against competitors it says benefit from unfair subsidies. In fact, it’s not even the only Washington company doing so.
U.S. companies are bringing new trade lawsuits against their foreign competitors with a scope and frequency not seen in more than 15 years, government documents show, as a wave of new complaints builds under President Donald Trump.
A Washington Post analysis of Commerce Department data found 23 new trade disputes initiated since January, making 2017 the busiest year for tariff cases since 2001. The new cases target trade between the United States and 29 countries, the most in any year since 2001.
The cases include fights over Korean washing machines, Spanish olives, Chinese aluminum foil, Vietnamese tool chests, Argentine biodiesel and Canadian jetliners. The U.S. trade warriors include financially strapped solar-panel manufacturers, downsizing Rust Belt steel plants and declining California olive farms.
Boeing, which won heavy tariffs against U.S. imports of Bombardier’s CSeries jetliner in preliminary rulings this fall, isn’t the only Washington state manufacturer to launch a trade case this year.
North Pacific Paper, known as Norpac, is a Longview mill producing newsprint and other papers. It accuses Canadian competitors of flooding the U.S. market with less expensive product. As a result, Norpac claims, it has been forced to trim its staff from about 450 to 350 employees in the past year.
The Commerce Department and International Trade Commission are expected to make final determinations by mid-2018 on the petition, which seeks tariffs of up to 50 percent or more, according to Commerce documents.
Several requests came from companies that are under foreign ownership. And in a shift from previous years, some profitable corporations are asking the government to place new restrictions on their foreign rivals, taking advantage of a recent change in federal law.
The surge of complaints comes as the White House moves to redefine America’s role in the global economy.
“At President Trump’s direction, we have told American businesses that we will be more enforcement minded than any recent administration, while also remaining committed to a fair and transparent process that is professionally and impartially implemented,” Commerce Secretary Wilbur Ross said in an emailed statement. “They know we will stand with American workers in the face of unfair trade practices.”
Tariff cases typically start when U.S. companies formally accuse foreign competitors of “dumping” products in the United States at unfairly low prices or benefiting from unfair subsidies, or both. Then the Commerce Department and a quasi-judicial U.S. agency called the International Trade Commission decide what to do.
Ross has said he wants the government to bring more cases on its own, something that could let companies save on legal expenses. The Commerce Department took its first step in that direction in a November tariff action against sheet-metal distributors in China, the first government-initiated action since 1985.
The Washington Post’s count of 23 new disputes in 2017 is based on the number of petitioners bringing cases for new tariffs; if for example a single U.S. company asks for tariffs on products from 10 countries, the Post treated it as a single new dispute even though such an action would spur 10 Commerce Department investigations.
When calculated based on the number of new investigations — as the Commerce Department tends to represent the trend in its news releases — there were 79 new investigations in 2017, reflecting a massive 65 percent jump over the previous year and a 16-year high.
Since most of the new cases are just beginning to work their way through the government’s deliberative process, it is too early to tell whether they will ultimately succeed.
Some companies are pushing for price quotas, which forbid foreign firms from selling below a given price. And in two cases this year, three companies have invoked a powerful and seldom-used U.S. trade lever called the “safeguard” provision, which imposes blanket taxes on products regardless of the country of origin. Such cases are unique in that they require a direct signoff from the president; before Trump took office, no company had asked to be safeguarded in this way since 2001.
“The fact that we have already seen two of these cases in 2017 should be a clear signal that corporate America thinks the Trump administration is going to grant it protection,” said Chad Bown, a fellow at the Peterson Institute for International Economics, a research and policy organization focused on global trade.
The Trump administration is preparing to rule on both cases early next year.
The U.S. companies seeking tougher import duties argue that trade restrictions are needed to level the economic playing field and sustain American jobs, and have little to do with politics or Trump.
For instance, two family-owned olive-farm conglomerates, Bell-Carter Foods and Musco Family Olive, are asking the Commerce Department to counteract Spanish olive farmers that they say are propped up by an elaborate system of farm subsidies there.
A coalition of U.S. biodiesel manufacturers claims rivals in Indonesia and Argentina are selling their product in the United States at unfairly low prices. It says the Argentine government also is giving tax breaks to exporters to unfairly subsidizing the industry.
Two companies asking for blanket “safeguard” protection — Georgia-based Suniva and Oregon-based SolarWorld USA — are solar-panel manufacturers that make photovoltaic cells, the tiny chips that convert solar energy into usable power.
Over the past few years, they claim a flood of less-expensive components from Chinese solar manufacturers have put them at a disadvantage; the two firms have since filed for bankruptcy and have laid off thousands.
Their claim, however, does not have the backing of others in their industry: The trade group Solar Energy Industries Association opposes the tariff, which it argues will cause 88,000 jobs to be lost elsewhere in the industry. The International Trade Commission ruled in SolarWorld’s and Suniva’s favor in October, but the two companies said the duties it recommended are too small.
Others seeking tariffs are not suffering nearly as badly. The third company asking for broader safeguard protection — Chicago-based home appliances giant Whirlpool — logged $5.4 billion in sales this year.
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But Whirlpool’s profit margins have been dwindling for years, in part because it claims it is losing market share in a key product category — washing machines — to Korean manufacturers LG and Samsung.
Whirlpool argues they have been dumping washing machines in the United States for years and moving their production centers around the world to avoid earlier tariffs.
In arguing against tariffs, the foreign companies have pointed out that they also employ Americans.
“No one should doubt our commitment to creating jobs in the U.S. We have been marketing our products here for nearly 40 years and have more than 18,000 workers,” Samsung senior vice president John Herrington said in a statement rebutting Whirlpool’s tariff request. “We know what it means to be an American manufacturer, we are an American manufacturer, and we are in it for the long run.”
Several of the companies asking for import protection are actually under foreign ownership. They include the U.S. subsidiary of Nan Ya Plastics. The Taiwanese plastics manufacturer is asking for new restrictions on Korean and Taiwanese polyester products as part of a long-running trade dispute.
A U.K.-based metals conglomerate called Ferroglobe has asked for U.S. restrictions on silicon metal from Australia, Brazil and Norway. It is waging a parallel trade war in Canada, where it is asking for new restrictions on silicon imports from four countries.
DAK Americas, the North Carolina-based subsidiary of one of Mexico’s largest textile firms, is teaming up with Indorama Ventures USA, the U.S. arm of an Indian firm. They are asking for restrictions on textile products from Brazil, Indonesia, Korea, Pakistan and Taiwan.
The complex international connections of those asking for tariffs — and the often strong U.S. presence of the companies they are targeting — illustrates a problem for import duties: Foreign companies that find themselves slapped with tariffs can sometimes avoid them by moving production to a third country, or even to the United States.
“Tariffs really don’t work … if you apply a tariff they can still move that good through another country,” Barry Zekelman, chief executive of Illinois-based steel-ipe manufacturer Zekelman Industries, told the cable channel CNBC earlier this summer.
Zekelman is teaming up with four other steel firms — ArcelorMittal, PTC Alliance, Webco Industries and Michigan Seamless Tube —- to call for a broader system of quotas that would set fixed minimum prices for foreign firms.
Steel companies like Zekelman — which account for about half of the new requests in 2017 — got a tease of broader-reaching action when early in Trump’s term the White House announced it is investigating whether to label foreign-made steel and aluminum a national security risk, something that would impose harsh restrictions on foreign steel imports.
That effort, though, has been stalled for more than six months. In a July 25 interview with The Wall Street Journal, Trump said any action on specialty metals is “waiting till we get everything finished up between health care and taxes and maybe even infrastructure.”
Then on Nov. 28 the Commerce Department took the highly unusual step of bringing a tariff case on its own, asking for tariffs above 57 percent on aluminum sheet metal from China. Officials insisted the effort was separate from the earlier specialty metals investigation.