The U.S. Commerce Department has proposed levying anti-dumping duties on Chinese flooring manufacturers after an investigation against hundreds of Chinese companies revealed that some were receiving illegal government aid.
The ruling is designed to keep manufacturing jobs in America, but it will raise consumer prices on hardwood flooring, said Kim Gavin, editor of Floor Covering Weekly.
"Each side is clearly passionate about their position," Gavin said.
The duties, which were supported in part by U.S. flooring giants Shaw Industries and Mannington Flooring, range up to 27.01 percent for some Chinese companies, the agency said. But others will pay 2.25 percent, or in some cases, nothing.
"Companies that sent in their books for the investigation, their duty is low, and companies that didn't cooperate, their duties are very high," said Kemp Harr, publisher of Floor Focus magazine.
Commerce said that 127 companies chose not to respond and will be charged the highest 27.01 percent import duty.
The ruling primarily concerns a type of veneered plywood that has become popular in the past five years, Harr said.
About 50 percent of wood flooring sold today is plywood with a thin wood veneer on top, as opposed to solid planks that make up the other half of wood flooring on the market. Of that 50 percent, Chinese-based companies have gained control of roughly half the "multilayered wood flooring" market, Harr said.
Rick Hooper, general counsel for Shaw, said that the Commerce Department was simply promoting "a level playing field" in international trade.
"Shaw is redressing current practices where the company is unfairly disadvantaged and is pursuing options available under international trade law," Hooper said.
The government ruling this week mirrors a recent decision made by the European Union against Chinese companies regarding ceramic tile. But some groups still aren't convinced that there's a need for regulation that raises prices.
The Alliance for Free Choice and Jobs in Flooring, which is made up of importers, distributors, retailers and others, is unhappy about higher-priced consumer flooring, according to Jonathan Train, president of the alliance.
Train praised regulators for deciding not to levy any fines against three of the Chinese companies investigated, saying that it undermines "the overblown allegations of the petitioners that they are injured by overseas subsidies."
"Anything that artificially inflates consumers' and builders' costs, and restricts their range of choice, should be discouraged during these challenging economic times," Train said.
The Department of Commerce will make its final ruling in June, and the International Trade Commission will weigh in on July 21, 2011.