- Nail Values [Downloand PDF]
Who knew the lowly nail–so important, yet so often ignored–could inspire passion, patriot-ism, and even poetry? But the oft-overlooked fasteners, galvanized and hot-dipped, long and short, collated and in bulk (but not roofing), evoked all three in what one would think should have been a dry, day-long hearing before the U.S. International Trade Commission.
In the end, it's the price of nails that pits U.S. nail manufacturers who make their goods domestically against those who outsource some of their production to China and the United Arab Emirates.
U.S. nail makers allege that companies in those two countries are guilty of "dumping" nails in the U.S.–selling them at a price below the producer's sales price in the country of origin.
Some U.S. nail manufacturers say they might not survive if nails continue to be imported from China at what they say are artificially low prices. Already, they say, these imported nails have flooded the market, their volume increasing by 70 percent between 2004 and 2006.
At risk for U.S. nail makers who sub-out some of their nail production to China and the UAE, nail distributors, and consumers is having to pay more for nails if the U.S. Trade Commission agrees that nails were being imported at artificially low prices and permanently imposes tariffs on nails from those two countries.
There's another risk as well. Those who oppose anti-dumping measures say the U.S. nail makers can't make enough nails to meet demand and haven't been willing to package them to their specifications.
Yet the U.S. companies say they have capacity that's not being used and have not been willing to invest in providing more types of nails and higher levels of service because prices have been so low they can't make any profit.
The companies that brought complaints of dumping before the U.S. International Trade Commission have won the first round. In January, the Department of Commerce announced its decision that Chinese producers/exporters sold nails in the U.S. at between 20.77 percent and 118.04 percent below fair value, and that a company in the United Arab Emirates was exporting them at 4.47 percent below value. As a result, the U.S. Customs and Border Protection Agency has been asked to start collecting extra fees from the companies accused of dumping.
Not Nailed Down
The commission's decision isn't final. It will conduct a thorough investigation and is scheduled to issue a final determination by summer. In the meantime, U.S.-only manufacturers are optimistic they will be able to compete on equal footing.
"It basically got to a point where none of the bulk or collated nail manufacturers were able to make a profit," says Peter Cronin, vice president of sales and marketing for Davis Wire Corp. "They were selling below the cost for us to produce. There will still be plenty of nails available from off-shore sources, but, hopefully, they will be sold based on cost."
For some lively reading, and a less-lively education on how nails are constructed, check out the 236-page online transcript of last summer's hearing into nail dumping.
There are some examples of oratory not often seen in such dry public venues. U.S. nail manufacturers accuse other manufacturers who have taken their production outside the country of greed, while U.S. manufacturers and distributors of nails from China and the UAE accuse in-country nail makers of being lazy and unresponsive. Here are a few excerpts:
From Mona Zinman, president of ITOCHU Building Products and co-CEO of Prime Source Building Products: "In contrast to the U.S. industry, the Chinese were anxious to supply our needs. This is the business the domestic USA mills turned away."
Zinman said she repeatedly asked Keystone, a now-defunct U.S. nail manufacturer to provide various packaging and products only to be turned down, even on a proposal to make patriotic nails.
"We went to them with the idea, okay, you make sinkers. This is a big nail product for you. How about we come up with ? red, white, and blue sinkers? We go out, we sell them to all the Home Depot stores, all the Lowes stores, which is [sic] our main customers, we could have gotten exposure in 3,000 stores throughout the country. We didn't care about the price, it was an irrelevant factor. Made in America, USA, red, white, and blue sinkers. ? The answer? 'No, we can't do it.'"
Not so, said the U.S. nail manufacturers' counsel Paul Rosenthal: "It is ridiculous to suggest that this industry, which supplied most of the market for a long, long time, couldn't, didn't make the SKUs and that the only reason that the people behind me are going offshore is because they can't get the product here. The reason why they've gone offshore is price. Keystone ? did investigate the whole red, white, and blue sinker issue. The question was always price. Price, price, price. So you hear it's unavailable. It's unavailable for the price you want to pay."
Then finally, poetry from Will E. Leonard, an attorney representing Black & Decker, which sided against imposing anti-dumping duties. First he recited the "For want of a nail" verse, then: "In these times, should we want for a nail, we shall all be lost. That is a circumstance we must avoid at any cost. Imports are a staple of supply today, or perhaps methinks I can put it this way: A really short, short tale, and I mean not to rail, you don't have to be from Princeton, Harvard, or Yale to know some U.S. producers are doomed to fail. What they want to put up for sale is nothing new, is really stale. So a few of the industry doth flail. Castigate imports is what they will wail. Blame a demand shift, a supply shortage, a plant fail, but do not blame any Chinese nor UAE nail."