Department of Commerce’s early determinations mirror industry and workforce concerns.
By Scott DeFife
The June announcement that the U.S. Department of Commerce preliminarily determined the government of China is unfairly subsidizing its glass wine bottle industry has generated renewed interest in the import of glass containers — from China and a number of other countries. The early determination, resulting in cash deposit requirements for Chinese glass container imports, as well as the issuance of preliminary subsidy rates, spotlights the ongoing importance and validity of the case before the Commerce Department.
As the investigation progresses throughout the summer, and further findings of anti-dumping on imports of 750ml sized bottles from Chile, China and Mexico proceed, it is a good time to revisit recent history on glass container imports, tariffs and what may lay ahead.
Import and Tariff Background of Glass Containers
Beginning in 2014, the Glass Packaging Institute (GPI) and its member companies took notice of a steady rise in glass container imports from China. While imports of glass containers are tracked by U.S. Customs and Border Protection and the Department of Commerce by size only (not beverage-specific end market), a significant uptick in the 750ml sized category was also noted.
Between 2016 and 2018, imports of all Chinese glass food and beverage containers rose by 32%, an increase of 463 million additional bottles and jars. As the domestic glass industry spotted the significant increase, our attention began to focus on certain container sizes and their likely end market destinations.
During the same time frame, imports of Chinese glass bottles in the 750ml (the standard for wine) bottle size increased by 22% (an additional 169 million bottles). This was compounded by an overall rise in wine bottle-sized imports from China of 57% since 2008. In 2018, China imported 523 million 750ml sized bottles into the United States, the highest full-year total on record.
Sec. 301 Actions and Resulting Tariffs
In 2018, GPI testified before the Office of the U.S. Trade Representatives (USTR) in support of a 25% tariff on imported Chinese glass bottles and jars, noting that glass containers produced for these primary end markets are not unique to Chinese-based manufacturers and can be sourced throughout North America and elsewhere.
GPI also explained that domestic glass container plants are highly regulated, Title-V permit required operations, with greenhouse gas emissions regularly monitored by the Environmental Protection Agency (EPA) and, in states including California — and, in coming years, Oregon, New York and Washington — part of formal Cap and Trade programs, making them among the most transparent and efficient container operations in the world. Our West Coast plants, where the vast majority of domestic wine bottles are made, have to compete with largely unregulated container production from China and elsewhere, placing U.S. manufacturing plants and supporting workforce in jeopardy.
The Sec. 301 investigation, which resulted in an initial 10% tariff, was increased to 25% the following year. Glass containers remain included underneath the “List 3” of the tariffs. The tariffs had an initial positive effect in reducing glass container imports from China.
In 2019 and 2020, all food and beverage glass container imports from China decreased by 45%, with the 750ml (standard wine) sized bottles decreasing by 55%. At the same time, domestic end market production and shipments began to stabilize and even experience increases in the wine, spirits, food and non-alcoholic beverage categories.
Chinese Glass Container Manufacturing
No public data is available with respect to direct greenhouse gas emissions, energy use, production, recycled glass use or raw materials sourcing utilized to manufacture Chinese glass containers. This is sharp in contrast to U.S. made glass bottles.
The plant of production for many Chinese glass containers is also often unknown with the identifying “punt” mark on the side wall or bottom of the bottle or jar absent. This identifying mark, important in instances of potential recalls, defects and similar circumstances, is absolutely critical for the regulatory and consumer marketplace.
Chinese glass container manufacturing companies largely rely on their country’s synthetic soda ash facilities for bottles and jar manufacturing; it’s an energy intensive and emissions producing process. The U.S. is home to the world’s largest naturally occurring supply of trona, used to make soda ash for the glass container and other end markets. Emissions and energy use at domestic soda ash operations is significantly lower.
Chinese Imports on the Rise Again
After the noted years of decreased imports, the United States International Trade Commission (USITC) shows increases in Chinese imports of 750ml sized bottles, every month since September 2023, now up 53% YTD (through the end of April). In the “all food and beverage sizes” category, Chinese glass container imports have increased every month since October 2023, up 27% YTD through April.
During the same YTD time frame, domestic shipments of glass produced in the U.S. and sent to customers are down 15% for the spirits market and 12% for wine market customers. As the Department of Commerce continues its investigation into anti-dumping penalties and subsidies for 750ml bottles imports, GPI continues its support of the U.S. glass container market, our supply chain and brands.
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Scott DeFife
Scott DeFife is president of the Glass Packaging Institute (GPI), the North American trade association for the glass food and beverage manufacturing companies, glass recycling and other partners and suppliers to the industry. The industry works closely with local and state governments throughout the country on issues surrounding sustainability, recycling, energy and greenhouse gas emissions goals and mandates.
