China Putting American Pencil Producers Out of Business
Despite anti-dumping duties being imposed against Chinese imports of lead pencils used by millions of children in classrooms throughout America, the Asian nation is still making it very difficult for U.S. producers to compete, according to Bloomberg News.
“The yellow pencil basically became a Chinese commodity,” Jim Weissenborn, CEO of General Pencil Co., told Bloomberg News.
“We’ve had to become a very boutique type of business in order to survive. Anti-dumping helps the companies that are left get some relief from this onslaught.”
Last year alone, China imported $59.7 million worth of pencils to the U.S. That accounted for 37 percent of all imported pencils, according to Bloomberg News.
China paid just $4 million in anti-dumping duties on the pencil imports.
The market is much more lucrative than one would think. About $3.6 billion worth of pencils are sold in the U.S. each year.
Through illegal trade practices, China continues to grow a larger and larger share, hurting the domestic industry.
In 2004, U.S. producers controlled 28 percent of the market. In just four years, by 2008, the share was cut in half, to just 14 percent.
“The dumping order has not kept Chinese pencils out,” Charles Anderson, a Washington-based consultant for Dixon Ticonderoga Co., the Heathrow, Florida-based maker of yellow pencils.
“Specialty products or higher- value products are what the U.S. producers really concentrate on.”
The domestic pencil manufacturing industry is just a small example of the fact that, even with tariffs, American companies are unable to compete against Chinese competitors that refuse to play by the rules, which are highly subsidized by their government, dump products into the American market and benefit from a highly undervalued currency.