Tariffs on Glass Manufactured in China: How Berlin Packaging Is Uniquely Positioned to Handle Supply Chain Complications

Tariffs on Glass Manufactured in China: How Berlin Packaging Is Uniquely Positioned to Handle Supply Chain Complications

With ongoing tariffs and other geopolitical circumstances that can wreak havoc on supply chains, you need a packaging provider that’s one step ahead in circumnavigating issues. This white paper explains the basics of anti-dumping and the current status, and highlights Berlin Packaging’s positive actions to mitigate the situation for their customers.

By: Berlin Packaging Specialist
Date: February 26, 2020

Background:

On September 24, 2019, a coalition of American glass manufacturers, including Anchor Container Corporation and Ardagh Glass Inc., filed petitions with the US International Trade Commission (ITC) claiming the Chinese Government is subsidizing its glass industry and that Chinese manufacturers are selling exported products at a price lower than the cost of production. These are classified as anti-dumping petitions.

On November 9, 2019, an ITC Committee decided that further investigation is needed. This means that these anti-dumping claims came before the Department of Commerce (DOC).

With the ITC finding that there was enough evidence for further investigation, these claims came before the DOC in two proceedings:(1) a countervailing duties proceeding (CVD), and (2) an anti-dumping proceeding (AD).

What is anti-dumping law?

The US anti-dumping law imposes special tariffs to counteract imports that are sold in the United States at less than a “normal value” or below the current market rate.

What is countervailing law?

The US countervailing law imposes special tariffs to counteract imports that are sold in the United States with the benefit of foreign government subsidies.

What is the scope of the current anti-dumping petition?

The products covered by this investigation are glass containers with a nominal capacity of .059 liters (2 fluid oz) to 4.0 liters and an opening mouth with a nominal outer diameter of 14 milliliters to 120 milliliters. The scope includes glass jars, bottles, flasks and similar containers that are being produced in China.

What other countries are impacted?

The coalition only filed the anti-dumping petition against China. Taiwan, Hong Kong and Southeast Asia were not included.

Timeline and Outcomes:

  1. On February 25th, 2020, the DOC announced that they have levied a countervailing tariff on most glass containers made in China of approximately 23%.
  2. The second tariff will be decided on by the DOC will be announced approximately April 22nd and is expected to be significantly higher than the countervailing tariff.

What happens with the existing tariffs on goods imported from China?

While discussions between the US and China may impact the existing tariffs, the 25% tariff remains in place.

How can we help?

Berlin Packaging is uniquely well-positioned to handle this situation. We have been closely monitoring and diligently working to proactively address these tariffs. As a company, we are pursuing two paths:

First, we have voiced our objections to these tariffs through written testimony, as well as with meetings with policy makers at the White House and in Congress. We are against these tariffs and believe they will cause significant disruption in the supply chain and will ultimately hurt the US consumer.

Second, we have made significant investments to mitigate or eliminate the impact of the tariffs on our customers packaging costs. Some of the actions Berlin Packaging is taking on behalf of our customers include:

  • Proactively building new molds and resourcing items to other competitive international manufacturers outside of China. We are currently building tools and securing capacity with manufacturers in Europe, Southeast Asia, and South America.
  • Moving production with the current manufacturers from their plants in China to their plants in other countries.
  • Closely monitoring inventory in advance of the projected tariff assessments to be held in our warehouses in the US.

We have mobilized an entire team dedicated to supporting this initiative and to put our customers in the best possible position.

Let us help you work through these supply chain challenges.

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