ECONOMYNEXT – The United States International Trade Commission has slapped a tax on off-the-road (OTR) tyres on the claim that they are being ‘dumped’ in the US by exporters in Sri Lanka.
The USITC said it has determined that goods are "sold in the United States at less than fair value and are subsidized" by Sri Lanka’s government.
A similar determination was made against India.
The US Department of Commerce will issue an anti-dumping order, slapping countervailing duty on imports of tires from Sri Lanka.
The taxes are expected to be effective from June 2016 when a prelimiary determination was made. Sri Lanka based firms inlcuding Camso-Loadstar will be charged at least a 2.9 percent tax, the International Trade Administration of the Commerce Department said at the time.
‘Anti-dumping’ taxes push up costs of consumers harming them, and fatten the profits of less efficient domestic manufacturers.
‘Anti-dumping’ laws were brought in as consumers became more aware of general protectionist taxes and the harm it causes to the poor and it became less easy to maintain high import tariffs to protect profits of businesses and also jobs.
The action against Sri Lanka was moved by US domestic producers and labour unions.
If exporters are in fact subsidized it is a tax on the citizens of the exporting countries.
Usually however manufactured exports from countries like Sri Lanka are cheaper than the US, because wages are lower.
"The antidumping law, perhaps the most arbitrary and disruptive U.S. trade barrier, is defended as a means of ensuring “fair” trade and maintaining a “level playing field” for domestic producers," explains Daniel J. Ikenson, from Cato Institute, a pro-poor think tank.
"Tough antidumping rules, its defenders claim, facilitate freer trade by providing assurances that “unfair” trade will be punished and thus deterred. But that dubious justification is a smokescreen, pure and simple.
"The fact is that the antidumping law is protectionist, contradictory and unfair. Its overzealous application routinely punishes U.S. importers and foreign exporters who transact fairly…"
The methods arriving at whether a good is dumped "are rigged in favor of protectionist outcomes, but are insulated from popular scrutiny by arcane and highly technical procedures," Ikenson says.
In Sri Lanka, anti-poor Mercantilists are trying hard bring in anti-dumping laws to protect fat cat domestic producers as pressure builds to remove massive import protection to several big businesses. (Colombo/Feb04/2017)