Additional Tariffs on Chinese Quartz will Disrupt Natural Stone Market in Oklahoma

China Tariffs

The Trump Administration announced on July 10 plans to introduce a 10 percent ad valorem tariff on $200 billion in imports from China, and the list includes nearly all dimensional natural stone, agglomerated slabs (which include quartz surfaces) and an assortment of other hard surfaces, including some ceramic tiles.

 

The tariffs will be subject to public hearings in August by the Federal Office of U.S. Trade Representation, and could go into effect early in the fall.

 

The newest tariffs would be compounded on the additional tariffs placed on Chinese quartz surface products after the U.S. Department of Commerce Import Administration and the U.S. International Trade Commission determined a U.S. industry is materially injured by imports of quartz surface products from China that are allegedly subsidized and sold in the United States at less than fair value.

 

Who’s going to be impacted?

The additional tariffs will continue to affect the price of Quartz in Oklahoma and could influence a change in the industry trends.

 

It will bring fairer practices back into the industry. Right now, the prices are artificially low because of cheap quartz imported to the U.S. from China.

 

Commercial buyers will be affected the most significantly by the potential tariffs because they almost exclusively order product from China.

 

The general commercial contractors will be put in a very complicated situation. Most of the jobs
that were bid in Chinese quartz will no longer be valid. They will be forced to switch to a higher priced quartz or to a more competitive natural stone. This could be close to a billion dollar impact.  

 

Cambria paved the path to new tariffs.

On April 18, Cambria, the U.S. producer of quartz, filed antidumping and countervailing duty petitions claiming the Chinese producers have used foreign government subsidies and dumping to gain an unfair advantage in U.S. markets.

 

The U.S. Department of Commerce Import Administration investigates any antidumping petitions. The administrators will examine whether or not a foreign company (in this case China) priced their products below production costs in their home market or priced their product cheaper in the United States than in their home country.

 

The U.S. International Trade Commission will examine whether a domestic industry experienced material injury from the unfair trade practices. Both the IA and the ITC have to vote yes for the tariffs to be placed on the import.

 

Between 2000 and 2012 the IA and ITC ruled 67 times that China violated fair trade practices by dumping products in the U.S. Market. Countervailing is determined by whether or not a foreign government provided subsidies to encourage exports - a trade practice that is banned. The U.S. Department of Commerce will determine subsidy margin, and U.S. International Trade Commission ITC makes the material injury determination.

 

The Trump Administration is Responsible for the Newest Tariffs.

Cambria hasn’t influenced the newest tariffs because the 10 percent tariff on quartz surfaces  are a part of the growing trade tensions between China and the United States.

 

The industry could also be affected by import categories getting a new 25 percent tariff that may affect machine tools and grinders/polishers.

 

Here are our recommendations for buyers.

When the tariffs go into place, buyers will have to choose brands who are engaging in fair trade practice, but many of the companies already have low inventory and are more expensive than Chinese products.

 

More homeowners and homebuilders might decide on natural stone instead of quartz because of the price increases and availability.

 

We encourage buyers to research the big picture behind their purchase. It’s important to know where your quartz surfaces come from and what practices are used to make the slabs.  

 

We don’t expect to see much price fluctuation in our products because we don’t purchase from China.

 

Rivers’ Edge Countertops only sells products we believe in and would use in our own homes. China isn’t regulated the same as the U.S. and other countries so the quartz surface could contain materials like gypsum, which has similar characteristics of quartz but is very soft making the slabs deteriorate over time.

 

Doing the research on quartz from China, we didn’t feel comfortable selling it or installing it in any home.

 

Rivers’ Edge Countertops always have aggressive pricing, but we do it by purchasing in bulk, which is why we have more than 1,000 slabs in stock right now.

 

The full report on the antidumping and countervailing investigation is available on the ITC website.

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