In July, an associate at AFS Corporate Member Charlotte Pipe and Foundry was asked to testify before a House Judiciary subcommittee on “Foreign Abuse of U.S. Courts.” The bipartisan hearing was chaired by Rep. Darrell Issa of California (R-48th).

Bradford Muller, vice president of corporate communications for Charlotte Pipe, appeared before the subcommittee on July 22 to provide testimony on trade fraud being committed by producers of cast iron soil pipe and fittings in China.

In 2017, through the Cast Iron Soil Pipe Institute (CISPI), the industry filed anti-dumping and countervailing duty cases again Chinese manufacturers. Dumping is when a foreign producer sells below their cost and “dumps” products into a country at prices below fair market value to take market share away from domestic manufacturers.

They can sell below their cost because they are typically being subsidized by their government – a practice that violates international trade law. That’s why a “countervailing duty” or tariff is applied to products receiving subsidies to level the playing field for domestic producers.

In CISPI’s case, the Department of Commerce determined that Chinese exporters had undersold and subsidized cast iron pipe in the United States up to 345% less than fair value. For cast iron fittings, Commerce determined the Chinese had undersold those products up to 494%. Duties to counteract these unfair trade practices have been in effect since August 2018.

“In response, unscrupulous foreign entities have turned to transshipping cast iron pipe and fittings through third countries and deploying other forms of evasion and customs fraud to obscure the true origin of their products to avoid paying these tariffs,” Muller testified.

Multiple national news outlets are reporting on the many ways Chinese companies exploit gaps in domestic enforcement to bypass tariffs, duties, and other trade restrictions. Charlotte Pipe was featured in a front-page story in the New York Times on May 27 lamenting the “whack-a-mole” nature of the process of tracking and shutting down these fraudulent shell companies––only to see them right back in business under a new name.

“Chinese producers of our products have successfully evaded more than $44 million of dumping and countervailing duties––money they have robbed of the U.S. Treasury,” said Muller. “Congress needs to step in and provide industry with far stronger remedies.”

Charlotte Pipe and Foundry is a leading U.S. manufacturer of cast iron and plastic pipe and fittings for plumbing applications. The company’s wholly-owned subsidiary, Neenah Foundry, is a preeminent manufacturer of municipal castings and operates three plants in the U.S.