Bedford Industries gets boost with imposing of new tariffs

WORTHINGTON — One of Worthington’s largest employers has received an assist from the federal government to protect itself and its employees from being undercut in the international marketplace.

The Wall Street Journal reported Nov. 25 that the U.S. had imposed “a small but groundbreaking set of tariffs” that penalized Chinese twist-ties “on grounds that Beijing undervalued its currency to gain market share for products.” The decision, the report stated, “was made in a case filed by twist-tie maker Bedford Industries Inc. of Worthington.”

Bedford Industries President Jay Millbrandt explained to The Globe on Thursday that last week’s governmental action was months in the making.

“We’d seen twist-tie material, which is one of our core products, coming in from China at extremely low prices,” Milbrandt said. “They were at prices that didn’t seem like they could even be manufactured at that price.”

As a result, Bedford decided back in March to file what Milbrandt said was an anti-dumping petition, which essentially told the federal government that “this doesn’t look right to us.” That effort, Milbrandt said, began a multi-step process in which the company hoped that the government — should it agree with Bedford Industries’ assertion — “would start the mechanism to essentially add additional tariffs to implement on twist-tie material in China to make it a level playing field.”

Initial action on the Bedford Industries petition came in June, Milbrandt noted.

“They had to go through a preliminary finding and decide whether they agreed with our evidence to open an investigation,” he said. “The U.S. Department of Commerce and the International Trade Commission, they voted unanimously in favor. That set up the investigation … the U.S. government takes over from there, and they go in and try to decide.”

Last week’s decision to impose the tariffs amounts to a preliminary determination on countervailing duties, which are defined as import taxes imposed on certain goods in order to prevent dumping or counter export subsidies. Milbrandt also indicated Friday afternoon that the company had learned earlier in the day about a second component of the petition related to anti-dumping margin, which pertains to the amount by which the normal value exceeds the export price or constructed export price.

"Let's say someone imports $10,000 worth of twist ties," Milbrandt said. "Customs (U.S. Customs Department) will require at the border 184.92% of that total. We don't get that money — the U.S. government does — but it's pretty clear now that there was a wide discrepancy."

Milbrandt noted that the benefit of the tariff begins immediately, adding that all government action on the matter is expected to be official by April 2021.

It was actually in October 2019 when Bedford Industries began considering a formal petition about the Chinese twist-ties, Milbrandt recalled. Ultimately, the company made the decision to move forward while it had the chance to do so, rather than risk waiting until later.

While Bedford Industries controls 80% or more of the twist-tie market, Milbrandt said, there have been occasions during the past year in which there were “some lost opportunities that came to us that ended up going to China because of the price.” The decision to file the petition, therefore, represented the taking of a “preventative” measure, he stated.

“This levels the playing field, and we get to compete on lead time and quality and customer service rather than this unbelievable low price that was impossible for us to meet,” Milbrandt said. “This is a tool that we can use because we care about our business and protecting our workforce in the community here, and we just couldn’t sit back and do nothing.”

The Wall Street Journal report noted that “while the tariffs apply only to twist-ties, the ruling by the Commerce Department Tuesday could potentially set a precedent for other companies that competed with Chinese imports to seek tariffs against their competitors’ products.”