China’s playbook is designed to manipulate American markets

Milwaukee Journal Sentinel

By Bob Wahlin

This year, we have had a chance to celebrate and reflect on the experiment in freedom that makes
our country great. The American Dream built over these last 250 years has produced the greatest
economy and innovations in the world.

As CEO of one of Wisconsin’s largest manufacturers, Stoughton Trailers, I am proud of the role
we play in this dream. Nearly 2,000 people work in our facilities in Wisconsin and Texas
building the trailers that transport food, medicine and everyday consumer goods across
America’s highways each day.

However, as we look ahead there’s a clear threat to our business and others: China’s history of
skirting international trade law at the expense of American manufacturing jobs.

China has developed a monopolistic playbook over decades, designed to manipulate American
markets across the economy. We’ve seen it from textiles and furniture, to steel and heavy
machinery. Backed by the Chinese Communist Party, state-owned businesses have crept into the
American transportation industry and adapted their playbook to exploit it.

The Chinese government heavily subsidizes these companies, allowing them to flood the U.S.
with artificially priced products. Once American customers are hooked on cheap imports and
they’ve destroyed the domestic market, they exploit their new monopoly and raise prices.

The U.S. Department of Justice recently indicted China International Marine Containers and
other Chinese companies for conspiracy to fix prices. The DOJ found “the multi-year conspiracy
roughly doubled the prices of standard shipping containers between 2019 and 2021, increasing
the manufacturers’ profits during the COVID-19 pandemic and global supply chain crisis.”
Chinese state-owned companies took control of the U.S. container industry using unfair trade
practices, and when America’s transportation industry needed containers most, they withheld
supply, raising prices.

The level of collusion found by the DOJ is disturbing. The indicted Chinese companies agreed to
limit production, ban construction of new factories, and even install surveillance cameras to
monitor each other’s compliance in their pact to collude.

We respect and appreciate our domestic competitors, but they are just that: competitors. They
won’t be consulted on our production and certainly won’t be permitted to install surveillance
cameras in our shops. This stark difference in behavior, competition vs. capitulation, is an
important distinction between the mutual respect that drives American companies and the
coercive relationship that controls state-owned Chinese companies.

American consumers and businesses should be grateful for the DOJ’s diligence in uncovering
this scheme and securing the indictment. This monopoly was carefully constructed after years of
tactical steps that allowed three Chinese companies to produce 96-100% of the world’s new
shipping containers.

State-owned Chinese companies offer a direct line to data and information sharing with the
leaders of the CCP. These privacy and security concerns caused our federal leaders to cut U.S.
defense contracts with companies linked to the Chinese military earlier this year, following a ban
on IT equipment used by the civilian federal workforce.

In its investigation, the DOJ found this interest in surveillance applies to smart containers too.
This allowed conspirators to monitor the activity and movement of U.S. goods in real time. With
rapid growth in smart technology used in trailers, this information sharing will be able to track
the movement of products across U.S. ports, highway systems and into every day American
businesses, too.

China will continue investing in its monopolistic goals as it seeks to control U.S. supply chains.
CIMC also sells chassis and van-type trailers in the United States through its subsidiary
companies including CIE Intermodal Equipment and Vanguard. It has tried the same approach in
both of these industries as well.

Fortunately, their efforts in the chassis industry were stopped by the U.S. Department of
Commerce and U.S. International Trade Commission. In the van-type trailers industry, the
Department of Commerce and ITC also issued preliminary findings that Chinese trailer
producers benefit from significant government subsidies that unfairly undercut the domestic
industry. These investigations and strong remedies, which include a 130.76% preliminary
antidumping levy on Chinese van-type trailers (with a final determination expected soon) are
vital to restoring the free and fair trade that allows American industries to compete.

Standing strong against China’s predatory trade and surveillance practices will help us rebuild
American manufacturing. This means holding a steady line against importers evading tariffs.
Together, these actions will help us maintain domestic capacity and create tens of thousands of
American manufacturing jobs.

Bob Wahlin is the President and CEO at Stoughton Trailers.