M&B Metal Products vs. China

Milton Magnus Sr. and Roy Brekle leave Pepsi-Cola to start their own company. During WWII, a local drycleaner tells them steel hangers are in short supply. Roy builds a hanger-making machine. Milton buys the wire and sells the hangers. A family business is born.

M&B is one of seven major American wire garment hanger manufacturers. The industry is healthy, employing hundreds of workers across multiple states.

Chinese hangers enter the U.S. market at prices below the cost of American raw materials—a clear sign of government-subsidized dumping. No legitimate manufacturer can compete.

Three U.S. producers file a Section 421 trade action. The ITC unanimously recommends tariffs. President Bush denies relief. American hanger makers are left to fend for themselves.

The world’s largest garment hanger producer—a U.S. company employing American workers and buying American raw materials—declares bankruptcy and closes. Other producers follow. The dominoes fall.

M&B shuts down its South Hill, Virginia plant due to the flood of unfairly traded Chinese imports.

As the last American wire hanger manufacturer, Milton Magnus III makes the decision that defines his company: stay and fight. M&B files an antidumping case against China, spending seven figures in legal fees. “When we filed our dumping case against China in 2007, we were on life support,” Magnus says.

The ITC unanimously rules that the U.S. industry was injured. Commerce imposes antidumping duties up to 187.25% on Chinese producers. For a brief time, M&B prospers.

ITC again rules unanimously for M&B. Commerce imposes additional duties. But the pattern is already clear: every time M&B wins a case, the hangers start arriving from a new country.

M&B files more than 35 e-Allegations with CBP as hangers appear from Thailand, Malaysia, and other countries that never produced hangers before the China case. CBP provides zero responses and takes no apparent action.

Magnus testifies before the House Small Business Committee, laying out the full scope of the evasion and the government’s failure to act. The testimony is later cited by the Select Committee on the CCP.

President Obama signs the Enforce and Protect Act, giving CBP new tools to combat duty evasion. Milton Magnus files the first successful EAPA allegation, proving hangers from Thailand were actually Chinese.

M&B files 25 EAPA allegations that CBP consolidates into 5 investigations. CBP finds evasion in all five cases. But the relief is limited and temporary—evaders shift to new countries and new shell companies each time.

When Asian hangers are difficult to get during COVID-19 supply chain disruptions, M&B is busy. Magnus invests in equipment, hires workers, and adds robotics to the Leeds, Alabama plant. But as cheap Asian hangers re-enter the market, M&B’s market share drops again.