The American Millwork Producers Coalition has filed petitions with the U.S. Department of Commerce and the U.S. International Trade Commission seeking to impose anti-dumping and countervailing duties on China's wood and sawmill frames and anti-dumping duties on imports of these items from Brazil. But first of all, what is a dumping tactic about?
The dumping tactic starts with a kind of price discrimination, which happens when a company has the possibility to charge for its product abroad, a value extremely reduced to what it charges in its country of origin. The intention of a lower price is to compete with companies that are already installed in the importing country, providing a competitive advantage with dumping. With this practice, other companies in the country are unable to reduce prices to the same level, mainly because of fixed costs, which can lead to bankruptcy.
In several countries there are measures to control dumping through the World Trade Organization (WTO). Anti-dumping measures are taken to protect domestic producers, while the import of goods and services is hampering their activities, either through taxation or limitation through quotas.
And that is exactly what is happening at the present moment related to the branch of wooden frames. Petitioners estimate that $ 350 million of these products were imported into the U.S. from Brazil and $ 215 million in 2019 were imported from China.
The outcome of the trial, which will be released on August 5, 2020, may directly influence the commercial health of everyone in this industry in Brazil.
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