Milton Magnus vs. China: The 22-Year Trade War Over Steel Hangers
In a beige building attached to a steel hanger factory, Milton Magnus, 72, faces his daily battle. He’s on the phone, pleading with customers to stick with his company, M&B Hangers, instead of switching to cheaper options from Asia.
Magnus’s fight isn’t just about hangers; it’s a 22-year-long trade war against what he believes is unfair competition from China. His eyes may be tired, but his determination is unwavering as he tracks the influx of steel hangers and their origins.
The Battle Begins: Standing Up to Unfair Trade Practices
Magnus’s war against Chinese imports started back in 2003 when he first testified before a federal agency about the impact of Chinese steel hangers on American manufacturing. His efforts led to significant changes.
Key Developments:
- 2008 Victory: Magnus persuaded the U.S. Commerce Department to impose tariffs up to 187% on Chinese hangers. This move aimed to counteract what Magnus claimed were unfairly low prices from China.
- Ongoing Struggles: Despite the tariffs, Magnus faced new challenges as Chinese manufacturers began to evade tariffs by routing their products through other countries.
Magnus’s relentless pursuit of justice saw him file multiple trade cases against countries like Taiwan and Vietnam. His efforts contributed to the passing of the Enforce and Protect Act in 2016, allowing for more robust enforcement of tariffs.
New Challenges: A Global Game of Whack-a-Mole
As Magnus celebrated his legal victories, new problems emerged. Steel hangers from Cambodia and South Korea started flooding the market, often at prices 30% lower than Magnus’s products. This development led to a significant loss in market share for M&B Hangers.
Current Situation:
- Cambodian Threat: Magnus’s team discovered that Chinese companies were shifting operations to Cambodia to avoid U.S. tariffs. They found evidence that Chinese firms were setting up shop in Cambodia to continue their trade.
- Legal and Financial Costs: Magnus has spent around $2 million on legal fees over the years. His fight has turned him into a trade expert, but the cost has been significant.
Magnus is not alone in his struggle. Economists debate whether the U.S. government should invest resources in protecting industries like hangers. Some argue that such protection might be less effective in the long run, especially when global competitors find new ways to bypass tariffs.
Looking Ahead: The Future of American Manufacturing
Magnus continues to monitor the situation, increasing production in anticipation of potential victories. He hopes that the U.S. government will impose countrywide tariffs on Cambodia, similar to what was done for Thai staples.
Key Insights:
- Economic Impact: Despite tariffs, the overall cost of imports has risen, affecting both American consumers and manufacturers.
- Political Perspectives: Presidential candidates have differing views on tariffs. Former President Trump supported higher tariffs, while Vice President Kamala Harris advocates for targeted tariffs. President Biden has maintained many of Trump’s tariffs while adding new ones.
Magnus’s journey is a testament to the complexities of international trade and the challenges faced by American manufacturers. His fight highlights the broader issues within U.S. trade policy and its impact on industries dealing with commoditized products.
Conclusion: A Persistent Battle for American Jobs
Milton Magnus’s battle against unfair trade practices is a compelling story of perseverance. His dedication to maintaining his family’s business amidst a shifting global market underscores the challenges many American manufacturers face. As he hands over management to his son and continues to innovate, Magnus remains hopeful that his efforts will lead to a more level playing field.
