For Immediate Release
Office of the Press Secretary
April 25, 2003
Memorandum for the Secretary of Commerce, the Secretary of Labor, and the United States Trade Representative
SUBJECT: Presidential Determination on Wire Hanger
Imports
from the People's Republic of China
Pursuant to section 421 of the Trade Act of 1974, as amended (19
U.S.C. 2451), I have determined the action I will take with respect to
the affirmative determination of the United States International Trade
Commission (USITC Investigation TA-421-2) regarding imports of certain
steel wire garment hangers from China. After considering all relevant
aspects of the investigation, I have determined that providing import
relief for the U.S. wire hanger industry is not in the national
economic interest of the United States. In particular, I find that
import relief would have an adverse impact on the United States economy
clearly greater than the benefits of such action.
The facts of this case indicate that imposing additional tariffs on
Chinese imports would affect domestic producers unevenly, favoring one
business strategy over another. While most of the producers would
likely realize some income benefits, additional tariffs would disrupt
the long-term adjustment strategy of one major producer, which is based
in part on distribution of imported hangers, and cause that producer to
incur substantial costs.
In addition, most domestic producers, including the petitioners,
have begun to pursue adjustment strategies. While these strategies
have included consolidation, modernization of production facili-ties,
and expansion into complementary products and services, domestic
producers are also expanding their use of imports. Indeed, a
substantial part of the surge in imports during the most recent period
measured was brought in by domestic producers themselves, including the
petitioners.
Moreover, after 6 years of competing with Chinese imports, domestic
producers still account for over 85 percent of the U.S. wire hanger
market. With this dominant share of the market, domestic producers
have the opportunity to adjust to competition from Chinese imports even
without import relief.
Furthermore, there is a strong possibility that if additional
tariffs on Chinese wire hangers were imposed, production would simply
shift to third countries, which could not be subject to section 421's
China-specific restrictions. In that event, import relief would have
little or no benefit for any domestic producer.
Additional tariffs would have an uneven impact on domestic
distributors of wire hangers. For some distributors, the tariffs would
likely lead to some income benefits. However, the tariffs would likely
harm other distributors in light of their business models.
Additional tariffs would also likely have a negative effect on the
thousands of small, family-owned dry-cleaning businesses across the
United States that would either have to absorb the resulting increased
costs or pass them on to their customers.
The circumstances of this case make clear that the U.S. national
economic interest would not be served by the imposition of import
relief under section 421. I remain fully committed to exercising the
important authority granted to me under section 421 when the
circumstances of a particular case warrant it.
Section 421 is not the only avenue available to the petitioning
domestic producers as they seek to adjust to import competition. I
hereby direct the Secretary of Commerce and the Secretary of Labor to
expedite consideration of any Trade Adjustment Assistance applications
received from domestic hanger producers or their workers and to provide
such other requested assistance or relief as they deem appropriate,
consistent with their statutory mandates.
The United States Trade Representative is authorized and directed
to publish this memorandum in the Federal Register.
GEORGE W. BUSH
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