One of the main claims that US President Donald Trump has made while slapping China with massive tariffs has been that Chinese exporters engage in dumping, which is charging a lower price of their product in that foreign market than prevails either there, in their own country, or in a third country. The idea is to win market share by undercutting local production. Trump critics have pointed out that the undercutting was achieved simply because Chinese labour was more productive and cost less than American. Unexpected support for Trump’s position has come from Pakistan’s Central Tariff Commission, which has delivered a finding that Drawn Textured Yarn imported from China is being dumped by Chinese manufacturers, to cause injury to Pakistani manufacturers. The CTC made this determination on a complaint filed by two Pakistani companies, Gatron Industries and Rupali Polyester, who make and sell DTY, on May 26 last year. In just over a year, the NTC made a finding that dumping was occurring and that the companies were suffering injury, and has imposed penalties in the shape of anti-dumping duties. It made its decision effective November 15 last year,
It should be noted that DTY is a crucial component in the textile industry, which uses it as a substitute for cotton, of which the natural production is not enough to mTY when it faced shortages of natural yarn, and finally began manufacture as an import substitution measure. However, the injury caused by the dumping, according to the NTC investigation included loss of market share and reduced profitability. At the same time, it made no finding of the kind of guidance from the Chinese government Mr Trump alleges. In this case it appears the dumping is a bit of sharp practice by Chinese minds, rather than a sinister conspiracy.
Mr Trump might be hard to convince, but he must be told that the law-abiding response to Chinese dumping, would be to activate the US International Trade Commission, which was the US Tariff Commission until 1974, as it could deal with individual dumping cases. He just need fill the Commission’s vacancies, and get affected companies to file cases. But that would not suit his rabble-rousing style of politics, in which making claims without proof is basic. Mr Trump must dread evidence that the Chinese government is too busy running the country to engage in commercial dirty work at the crossroads.
