Forget steel or aluminium. As President Trump finds that it’s not as easy as a walk in the park to punish China for dumping cheap steel and aluminium on American soil – without slapping the same tariffs on allies such as Canada or European Union – his administration may have found to way to punish the Chinese after all.

 

And nope, it has nothing to do with steel or aluminium. Under Trump administration, the U.S. Commerce Department has launched close to 100 investigations into various imports, mostly related to China. By throwing everything at China, including the kitchen sink, Donald Trump hopes something would stick without affecting U.S. allies, and his wish could soon be granted.

 

After the washing machines and solar panels, the U.S. could impose new tariffs specifically targeting China – rubber bands!! The Chinese could be in deep trouble (*grin*) if Commerce Secretary Wilbur Ross has indeed made up his mind as reported. As many as 150 American workers are in jeopardy because some foreign countries have been dumping rubber bands cheaply in the U.S.

Foreign rubber bands – from China, Thailand and Sri Lanka – are being sold in the United States at prices so low that they are throwing Alliance Rubber Company out of business. The U.S. manufacturer of rubber bands since 1923 has complained to Commerce Department 3 weeks ago that the foreigners are dumping rubber bands in the U.S. at unfair prices.

 

Obviously it’s a big deal because the economic superpower imported nearly US$20 million of rubber bands from those three countries last year alone. If found guilty, which is most likely, they would suffer tariffs from 27% to 133% – depending on the country and the type of rubber band. What this means is Trump could selectively punish the Chinese with 133% tariff while others with lower tariffs.

 

Commerce Secretary Wilbur Ross said – “The department will act swiftly. The Trump administration is committed to the enforcement of America’s trade laws that ensure U.S. businesses and workers have a fair chance to compete.” Alliance Rubber Company claims that the foreign producers are selling rubber bands at 60% less than the normal price.

Bonnie Swayze, president of Alliance Rubber Company, said – “Rubber band manufacturers from Asia are receiving subsidies from their own governments and are artificially lowering their prices in order to root out American competition. The products coming from those countries are as much as 60% less expensive than the normal price, and are frequently inferior products.”

 

Have American business owners gone overboard, crying like babies, every time they lose out to genuine competitors? In the case of rubber bands, clearly Mr. Swayze has nothing to worry since Chinese-made rubber bands are inferior than American-made. Consumers have the choice to buy superior Made-in-USA rubber bands but at a higher price.

 

Since America is the champion of free and open markets, those foreign countries are merely offering an alternative to consumers – low quality rubber bands at lower price. It’s hard to see how the U.S. Commerce Department could prove that Beijing has been subsidizing their rubber band factories. Perhaps Alliance Rubber Company is barking the wrong tree.

Unlike American workers, cheap labours from China, Thailand and Sri Lanka could easily bring down the total cost of production substantially, therefore, the 60% cheaper rubber bands. Unless the Chinese has stolen U.S. Intellectual Property in the making of rubber bands, it’s quite ridiculous to go as far as imposing tariffs on such low-tech products. But hey, it’s MAGA!!!

 

Other Articles That May Interest You …

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February 23rd, 2018 by financetwitter

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