Government Refuses to Bat for U.S. Companies

Government Refuses to Bat for U.S. Companies

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U.S. businesses spend millions of dollars in lawsuits to fight illegally subsidized foreign imports. Frequently however, the U.S. government fails to enforce penalties, costing millions of dollars and jobs.

Customs officials "basically turn their heads. They say they don't have the resources or they don't have the time. They say they can't do this, can't do that," David Libla, president of the Mid Continent Nail Corporation said. "We spend all that money to win the case and then assemble the truth, and our government lets the Chinese get by."

David Libla's experience is unfortunately not an isolated case. Since 2008, the Homeland Security Department has received more than 300 duty avoidance complaints from U.S. businesses. Lack of enforcement has cost the government $600 million during the past six years alone, as well as countless American jobs, according to the Government Accountability Office.

Determined to find out more on the issue, Sen. Ron Wyden (D-OR) had staffers pose as a fake American supplier to find out how foreign companies evade these duties and penalties. His investigation found a dozen Chinese companies openly offering in emails to ship products through other nations to avoid duties (also known as transshipment), or to outright lie about the country of origin.

"There are two key agencies dealing with this issue. One of them, Customs, in my view treats allegations of evasion of duties like junk mail. The other, ICE (Immigration and Customs Enforcement) is more interested in stopping illegal downloads of music than taking steps to protect tens of thousands of manufacturing jobs," Sen. Wyden said.

It's not only important to create policy that helps support American business, but a government willing to enforce it. The reprehensible behavior of the Customs Office, Homeland Security Department and U.S. International Trade Commission is appalling when the economy is in such a fragile state. In a world where other governments outright subsidize businesses, the U.S. government must be willing to enforce existing trade laws if companies are to stand a chance.

Source: Economy in Crisis

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