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DOC Eases Hanger Tariffs; Final Decision Due in June

WASHINGTON – The U.S. Department of Commerce (DOC) has amended its preliminary tariffs for several Chinese manufacturers of metal wire hangers, according to American Drycleaner, a sister Crain Communications publication. As a result, many importers’ rates will be cut in half.
The DOC determined in March that Chinese producers are dumping metal wire hangers on the U.S. market.
While a final ruling in the investigation will come in June, DOC ordered U.S. Customs & Border Protection in late March to immediately begin collecting a cash deposit or bond from Chinese manufacturers.
Hanger imports from China have jumped 258% in the last three years, from 1.04 billion pieces in 2005 to 2.70 billion in 2007, with a total value of $68.5 million.
The DOC’s antidumping decision collects a deposit based on the discount off Fair Market Value (FMV) each Chinese manufacturer sells its hangers. Shanghai Wells Hanger Co. is subject to the lowest rate, 33.9%, and 13 other companies are subject to a 45.69% tariff.
If DOC makes a similar final determination and the U.S. International Trade Commission (ITC) determines that imports “materially injure” domestic wire-hanger producers, an antidumping order will be issued.
DOC will issue its ruling June 2 and ITC will follow on July 16. Any antidumping order and tariffs will become effective one week later, on July 23.
Domestic manufacturers that ended production in the last five years are scrambling to reintroduce U.S. manufacturing. Scottsdale, Ariz.-based Laidlaw Corp., for example, has signed an agreement with Shanti Industries to begin the manufacture and sale of domestically produced hangers and poly bags from plants in Monticello, Wis., and Lake Forest, Calif., immediately.
“We now have the ability to provide our customers high-quality, cost-competitive products manufactured [in the U.S.] in addition to offshore facilities,” says Tom Schultz, Laidlaw's president. “We intend to rapidly expand U.S. capacity to serve the needs of our longtime customers and afterward offer product to the rest of the market.”
Industry associations estimate that operators will have to increase prices 5% to 20% in order to cover the increase in supply costs.
An overwhelming 86.8% of operators report that the price of hangers has gone up in the last month, according to an American Drycleaner survey. Only 5.9% of operators said that they haven’t seen a price increase, while slightly more (7.4%) weren’t sure if prices had gone up or hadn’t reordered since the tariffs’ debut.
Among the operators who are paying more for hangers, most are paying a lot more. Some 44.1% say they’ve soaked up price increases of 50% or more, and another 27.1% have seen prices jump 31% to 50%.
While some respondents are waiting for the dust to settle before raising retail prices, others said they plan to pass the increase in costs on to customers immediately.
 

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