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Two hundred workers could soon lose their jobs if
Precision Products, a leading manufacturer of lawn and garden equipment and
the largest employer in Lincoln, is forced out of business, company
officials say. Precision Products, owned by Gleason Industrial
Products Inc., supplies nearly 60 percent of the nation’s hand-truck
market, says vice president of sales and marketing Jay Kvasnicka, but it
will begin to lose business if Qingdao Taifa Group Co. Ltd., a Chinese hand-truck
manufacturer, continues to export its products to the United States at an
unfair rate. Gleason has accused Taifa of lying to the U.S.
government and gaining an export-tariff rate of 3.82 percent, Kvasnicka
says, which is astronomically lower than the People’s Republic of
China rate of nearly 383 percent. With this advantage, he explains, Taifa
can flood the market with cheaper products and knock U.S. companies out of
the running. The problem first surfaced in 2003, Kvasnicka says,
when Taifa entered the U.S. market and began shipping and selling its
products at prices cheaper than the cost of Gleason’s raw materials
alone. “When China came in, they were literally
cheating,” Kvasnicka says. “They began to capture all the major
customers and were on the verge of really taking all the
business.”
Gleason petitioned the U.S. Department of Commerce,
which later ruled that Taifa was unfairly “dumping” hand
trucks, injuring the U.S. market. According to a Commerce Department
spokesperson, an anti-dumping duty order was issued in December 2004,
giving Taifa a final export tariff of 26.49 percent. Matthew Jaffe, an attorney for Gleason, explains that
this order worked to level the playing field. “You don’t stop them from exporting to
the U.S.; you make them pay a tax — a ‘duty,’ ”
Jaffe says. “You are selling at this unfair price, so we’re
going to levy a tax on you that brings your unfair price to a fair
price.”
But the issue was still far from resolved. In December 2006, Taifa stated that it was not owned
by the Chinese government and requested that its anti-dumping duty be
further reduced to 3.82 percent. According to the Commerce Department, if a
company operates independently of its government it is permitted to apply
for its own duty rate. These statements raised eyebrows at Gleason,
Kvasnicka says, especially after company executives visited China and, they
said, found evidence that Taifa was government owned. They went a step
further, he adds, by hiring a Chinese lawyer who uncovered records in which
China claimed majority ownership of Taifa.
Gleason petitioned the Commerce Department a second
time in December 2007, requesting that the government penalize Taifa for
withholding information. However, on the basis of preliminary findings the
Commerce Department sided with Taifa and temporarily assigned the 3.82
percent export tariff until final results are issued in May. Kvasnicka says Gleason and other U.S. hand-truck
manufacturers are working to put pressure on the Commerce Department until
it reevaluates the decision and assigns the proper PRC-wide rate to Taifa. “The real point here is that Taifa lied to the
government,” he says. “The Commerce Department is rewarding
them when they should be penalized.”
A Commerce Department spokesperson says that the
government is reviewing this issue and has requested additional information
from Taifa regarding its ownership. Taifa could not be reached for comment for this
article.
Contact Amanda Robert at arobert@Illinoistimes.com.
This article appears in Apr 3-9, 2008.
