AUBURN, Maine — A small manufacturing business in Auburn scored a big win against its Chinese competitors.
Auburn Manufacturing Incorporated, or AMI, alleged that Chinese manufacturers were circumventing U.S. anti-dumping and offsetting duty orders. Following a federal determination, the U.S. Commerce Department is now cracking down on unfair trading practices by Chinese state-backed manufacturers.
This isn't AMI's first battle against Chinese-backed companies, and it may not be the last.
Kathie Leonard started AMI 43 years ago. The company makes fabrics and products that are insulated against extreme heat. Over the years, AMI has filled a growing demand by selling millions of pounds of fabric annually to more than 500 heavy industry businesses in 30 countries. From oil, petroleum, and shipbuilding like Bath Iron Works and the U.S. Navy.
"We see a lot of growth in that area, we serve the military with it, we serve defense contractors," Leonard said. Five years ago, the company which employs about 50 people watched those lucrative contracts disappear.
"We lost about 30 percent of our business in the United States in about three years," Leonard added.
Leonard later discovered that a similar product from China was being sold to her competitors at 30 percent less than her company's price. After the company had to lay off about 20 percent of its workforce, AMI fought back, filing an anti-dumping case with the Department of Commerce.
One million dollars in legal fees and nearly two years later, trade officials sided with AMI, imposing an import duty of between 200 and 300 percent on the same silica fabric her competitors were buying from China.
"They are going to keep doing this unless you fight back or push back and I was willing to do that," Leonard said. But the company's so-called "victory" against China's unfair trade practices was short-lived.
In 2021, the company started losing business again, amid COVID-19 supply chain struggles. Leonard later discovered that Chinese exporters found a way around the duty orders shipping the products into the U.S. under false labels.
"They are circumventing by calling it a different product, so they don't have to pay the same duty," Leonard explained.
Leonard and her team filed another claim against the Chinese trade cheating.
Last month, the commerce department issued a new ruling requiring customs and border protection to apply the anti-dumping and duty orders to Chinese products that claim to have lower silica content.
With a more even playing field, AMI said it can make bigger profits and invest in innovation. The company is also broadening its customer base and plans to make products for the aerospace industry in the near future. Leonard also hopes to add more jobs as the company continues to grow.
But she's not holding her breath when it comes to the possibility of taking on Chinese manufacturers again.