Mold makers, recyclers push US government on China issues

Mold making, recycling and manufacturing groups are urging President Donald Trump's administration to take a tough line on monitoring China's implementation of its trade commitments, accusing Beijing of uneven enforcement of rules to benefit its industries.

The American Mold Builders Association, for example, said the U.S. government's 25 percent tariffs on Chinese molds are necessary to protect against what it called industrial espionage, intellectual property theft, government subsidies and currency manipulation by Chinese firms.

AMBA and other business groups outlined their concerns in mid-September comments to the U.S. Trade Representative, which is preparing its annual report to Congress on Chinese compliance with its World Trade Organization commitments.

AMBA said Chinese manufacturers routinely submit price quotes significantly below the raw materials costs incurred by American mold builders, which has led to an influx of imported Chinese molds.

The trade deficit with China has increased to $376.8 million for plastic injection molds, with $164.6 million of the tooling being imported into the U.S. this year through July 2020, according to AMBA.

AMBA said the U.S. tariffs, under Section 301 of the trade statutes, were designed to shrink the trade deficit and level the global playing field. But a WTO panel ruled earlier this month that they violated international trade regulations.

Even so, China continues illegal trade practices, AMBA maintains, pointing to the transshipment of goods through third countries, the purposeful misclassification of goods and the undervaluation of goods "with government encouragement."

By circumventing the tariffs through evasion schemes, AMBA says Chinese mold builders continue to operate at an advantage over their U.S. counterparts.

Beyond molds, several groups urged the U.S. government to push for more open Chinese enforcement of rules around imports of scrap materials for recycling, including plastics, from the United States.

The Institute of Scrap Recycling Industries said the Chinese government has not properly notified WTO about many changes in its policies, outside of a broad import ban it first enacted in 2018 that has seen exports of plastics and other recyclable materials from the U.S. plummet.

"The first set of prohibitions implemented in early 2018 had been notified to the WTO, but subsequent rounds of import bans, overly strict product standards, challenging licensing requirements and nontransparent quota issuances were not notified," said Adina Renee Adler, vice president of advocacy for the Washington-based association.

She said ISRI has supported Chinese government import and export licensing systems over the last 15 years as a way to manage illegal waste imports and allow for commodity grade scrap materials to be brought into China for that country's manufacturing sector.

But she wrote in ISRI's filing to the government that since 2017, implementation of those rules has been uneven.

"Several of our members whose existing export licenses were expiring reported inefficiencies and possible extortion by Chinese government entities during the renewal process," she said.

Adler said there are indications that Chinese government policy is starting to formally recognize that scrap materials are not waste and can be valuable raw materials into other manufacturing.

But she said ISRI believes that Chinese government rules are not transparent around waste policy, such as a new solid waste law that went into effect in September, and general Chinese government plans for undefined bans on "all solid waste" in 2021.

"We have not found the Chinese government to be receptive to dialogue on these measures," Adler wrote.

As well, the National Association of Manufacturers and the U.S. Council for International Business in their filings listed the import ban on scrap plastic, paper and metals as an example of a Chinese trade restriction that impedes U.S. market access.

USCIB said that China argues the restrictive import polices on scrap imports are needed to protect the environment, but USCIB said overly tight restrictions force Chinese manufacturers to "source their feedstock shortages with carbon-intensive primary materials."