[Weekly Compilation of Presidential Documents Volume 39, Number 18 (Monday, May 5, 2003)]
[Pages 492-493]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Memorandum on Wire Hanger Imports From the People's Republic of China

April 25, 2003

Memorandum for the Secretary of Commerce, the Secretary of Labor, 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 facilities, 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

[Filed with the Office of the Federal Register, 10:55 a.m., April 28, 
2003]

Note: This memorandum was published in the Federal Register on April 29. 
This item was not

[[Page 493]]

received in time for publication in the appropriate issue.