By John Caicedo | 2025-01-31

LIMA -- Peruvian authorities are investigating Chinese companies for allegedly dumping a range of ranging from stainless steel kitchen sinks to zippers in the country.

In early January, the National Institute for the Defense of Competition and Protection of Intellectual Property (Indecopi) launched an investigation into Chinese exporters focused on stainless steel kitchen sinks.

Almost two weeks later, the probe expanded to include steel wire rods and carbon steel welded tubes.

According to resolutions published on January 23 and 28 in the Technical Standards Bulletin of El Peruano, these investigations aim to determine whether Chinese companies have engaged in dumping, or selling products below their real value to undermine competition.

Authorities also are examining allegations that Chinese manufacturers, in collusion with Peruvian importers, may be using alternative routes to evade sanctions for unfair trade practices.

Indecopi announced in El Peruano on January 28 that it had accepted a request to investigate alleged attempts to evade anti-dumping duties on zippers and their components. Though officially labeled as originating from Indonesia and Thailand, these imports are suspected of actually coming from China.

The same importers previously used a tactic of disguising Chinese imports as originating from Taiwan and Malaysia to evade anti-dumping duties.

Peru launched anti-dumping measures after Indecopi confirmed in 2021 that Chinese companies were manipulating information to evade taxes.

Once this was exposed and oversight increased, they allegedly shifted the strategy to Indonesia and Thailand.

According to María Gastañeta, a lawyer from the University of Lima, Peru's response through Indecopi is crucial as anti-dumping mechanisms help protect local industry "without resorting to protectionist measures that harm the free market."

"The first thing to understand is that anti-dumping legislation is international," Gastañeta explained in an article for the specialized magazine Doctrina published in mid-January.

"It has been developed and approved within the framework of the World Trade Organization (WTO), of which Peru is a member. Each member country has national regulations that govern the application of WTO standards,"

Distorting the market

Peruvian experts often note that Chinese exports frequently raise suspicions of the selling of products at artificially low prices to outcompete local or third-country producers.

While this practice may initially benefit buyers with lower prices, it ultimately distorts the market and drives competitors out of business.

This appears to be the case for the Peruvian company Manufactura de Metales y Aluminio Record, which saw a sharp decline between 2021 and 2024.

According to Indecopi's case file, the company's installed capacity usage dropped by 55.2%, its national market share shrank by 5.7% and its accumulated sales plummeted by 44.8%.

Company owners and executives blamed these declines on unfair competition from China, and Indecopi determined there was sufficient cause to launch an investigation in mid-January.

Corporación Aceros Arequipa (CAASA), another Peruvian company, also reported that Chinese exports of non-alloy steel wire rods to Peru between July 2023 and June 2024 were sold at dumping prices, causing losses to the local industry.

Non-alloy steels are iron-carbon alloys with a carbon content between 0.05% and 2%, containing only natural elements like sulfur, manganese and phosphorus.

Chinese exports of this wire rod to Peru surged by 136.2% between 2021 and 2024, severely impacting local production. Meanwhile, market prices fell by 18.3%, while production costs remained stable or increased.

According to the complainant -- whose profit margins dropped by 27.1% -- this is clear evidence of Chinese dumping practices.

In a third case subject to a probe, CAASA teamed up with national competitors Tupemesa and Precor to successfully petition Indecopi to investigate alleged dumping by Chinese exporters of hot-rolled carbon steel welded pipes.

If these investigations confirm dumping, Peru could impose new sanctions on the Chinese companies involved.