Warning of the potential damage to manufacturers in Buffalo and across upstate New York, Sen. Charles E. Schumer on Tuesday urged the federal Department of Commerce to reverse course on a proposed new policy that he said would weaken unfair-trade laws and allow more “targeted dumping” of cheap foreign goods on the U.S. market.
New York’s senior senator, a Democrat, called on the federal agency to protect U.S. companies like copper producer Aurubis, which has a manufacturing facility in Buffalo, from unfair competition by foreign producers.
Otherwise, he cautioned in a letter to Commerce officials, it “could cost the company a large number of jobs” and “could easily put their entire company, as well as many others across my state and the nation, at risk.”
“Federal regulations should protect, not hurt, upstate New York manufacturers like Aurubis in Buffalo, upstanding companies who are forced to compete with artificially cheap foreign imports,” he said in a statement.
Dumping refers to the mass sale by foreign companies of their products in the U.S. market at artificially low prices that are below what they might even charge at home. That drives up their sales while hurting U.S. companies that can’t compete with the unfair prices.
Targeted dumping happens when those foreign companies try to mask or hide the activity by doing it only with selected customers, regions or seasons of the year, so it’s harder to spot.
That means the producer sells at much lower prices to those specific buyers, regions or times, while selling at higher, regular prices to others in order to conceal what they are doing.
In response, the United States is allowed to calculate the percentage difference between the U.S. price of a product and the price in the exporter’s home country, and then assess that percentage on the product as an import tax to bring the below-market price up.
The Department of Commerce has used a controversial method in the past for identifying and measuring the degree of dumping that was occurring, but a World Trade Organization ruling essentially voided that tactic because it went too far and didn’t give foreign companies credit when they actually priced their products correctly. So the government agreed a year ago to abandon the practice.
But Schumer said Commerce is now going further than required by considering changes that would create a higher burden to prove dumping while limiting the import penalty that is supposed to equalize the prices.
“There is no reason that the United States should voluntarily weaken its targeted dumping methodology, and thereby reduce the remedies available to our domestic producers under the U.S. unfair-trade laws,” Schumer wrote to acting Secretary of Commerce Rebecca Blank. “Such a change would seriously hurt many companies across the State of New York.”
Aurubis Group is a leading copper foundry and the world’s largest copper recycler, specializing in making marketable copper cathodes from concentrates and scrap material.
It employs 6,400 people worldwide in Europe, Asia and North America, including 650 in Buffalo.
“I am mystified why the U.S. Department of Commerce would consider making unnecessary changes to its calculation methodology to significantly weaken our unfair-trade laws,” said Ray Mercer, president of Aurubis Buffalo.