Rep. Billy Long is pushing federal authorities to take a closer look at the goods global suppliers are shipping to the US. And, the world’s largest bedspring supplier, Leggett & Platt, is throwing its weight behind the effort – going as far as to hire a lobbying firm to convince lawmakers this is an important issue that needs to be addressed.
Specifically, Long is sponsoring a bill that would require US Customs and Border Protection to investigate claims that foreign companies are violating anti-dumping regulations by continuing to sell low-costs goods to US companies. Dumping is where foreign companies export goods at prices that are cheaper than domestic products, often to gain a larger portion of the market. Long’s “Enforcing Orders and Reducing Customs Evasion (ENFORCE) Act” would “aggressively enforce anti-dumping” and promote “free and fair trade,” according to the Missouri Republican.
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USA Today recently covered the story, and Lisa Reisman, founder and executive editor of our sister site MetalMiner, was interviewed by the publication and featured in the article. L&P claim Chinese manufacturers have found a way around anti-dumping regulations, sending Chinese-made bedsprings to a third country, so the origin of that product does not appear to be China. Lisa said this is a common practice for foreign manufacturers.
"It's very common in the industry for an importer to work with overseas suppliers to, shall we say, tweak the product or the description so they can avoid (U.S.-imposed dumping) duties," Lisa said in the USA Today article.
A key question for anti-dumping proponents is whether such activity runs counter to advocating for global trade and market prices. No doubt, it makes the supply chain a bit murky, to say the least. Long and other advocates for the ENFORCE Act say foreign companies should be abiding by the anti-dumping regulations in the US.
Sen. Claire McCaskill, D-Mo., another lawmaker that supports anti-dumping enforcement, said, “Unfortunately, too many industries in too many foreign countries cheat the trade system for their own advantage,” according to USA Today.
Some US businesses, including retailers, may feel differently, however. It isn’t a surprise that often companies turn to global sources to drive down costs. L&P's Chief Operating Officer Karl Glassman believes the retailers’ association would be against the ENFORCE Act because it could block them from working with the companies supplying the cheapest products – regardless of where they came from and how they arrive in the US.
Marguerite Trossevin, a trade attorney who advises the Retail Industry Leaders' Association, told USA Today that is “just not the case,” and retailers follow the law and do not want to do business with “cheaters."
While there is clearly support for the US enforcing its anti-dumping laws, the USA Today article does note that Long’s bill seems to be a “hard sell” in Congress, and similar legislation has failed to gain traction in the past.
In at-risk industries, procurement organizations need to develop a point-of-view on whether or not such legislation has the potential to pass – and if so, the implications on the total cost structure of their supply chain and whether higher costs for goods can be passed onto customers (or not).