Import duties proposed for hardwood floorcovering

Import duties proposed for hardwood floorcovering

July 12th, 2018 by Dave Flessner in Business Around the Region

The Trump administration is proposing to impose 10 percent import duties on many hardwood flooring exports from China, including some Chinese-made carpet and carpet tiles.

In the escalating trade war among the world's two biggest economies, the U.S. Trade Representative is considering an additional 10 percent ad valorem tariff on another $200 billion worth of products from China. The list covers 6,031 products, ranging from telephone and machine components to household goods, furniture and floorcoverings made in China.

The world's biggest floorcovering manufacturer, the Calhoun, Ga-based Mohawk Industries, had requested 25 percent tariffs on on four major types of hardwood floors imported from China to help protect U.S. manufacturing jobs.

Mohawk asked in May for import duties on about $3 billion of Chinese-made ceramic, laminated wood, plastic and particle board flooring., which the company said would "contribute to the Administration's efforts to eliminate China's policies and practices that unfairly benefit Chinese manufacturers and exports."

But many in the floorcovering industry are objecting to such import duties, which they claim could hurt consumers, manufacturers, distributors and retailers in the United States.

"If enacted, these proposed new tariffs will result in higher prices for the American consumers, manufacturers, and small businesses that rely on the wood products included in this list," said Cindy L. Squires, executive director of the International Wood Products Association, which represents 200 companies that import hardwoods and softwoods for flooring and a variety of other products.. "I remain hopeful that the U.S. and China can come together to address the root causes of this dispute so that imposition of these new tariffs can be avoided. It is so important to remember that no one wins a trade war."

Carpet manufacturers are split over the duties. Shaw Industries, a division of Warren Buffett's Berkshire Hathaway, is opposing any import duties, which Shaw Executive Vice President Tim Baucom said "could harm consumers with higher prices and fewer choices."

"We are opposed to the imposition of any tariffs that fail to take into account dynamic market changes, innovation in the industry, and consumer preferences," he said.

Kemp Harr, publisher of Floor Focus magazine and an industry analyst, said he understands the need for tariffs when a country or government is subsidizing the production of a product enabling it to be imported at a lower cost than we can make here in the United States.

"But this new list contains products like bamboo and cork flooring, the raw materials of which we must import," Harr said. ""The list also includes carpet and carpet tile — a product category that the U.S. is the dominant producer and Chinese imports haven't been an issue. At this point, it looks like all types of flooring have been included and I feel certain that the types of flooring that end up on the final list at the end of August will be much shorter."

The newly proposed tariff list, which is subject to public hearings and comments and could be altered by the Trump administration, follows two earlier tariff lists released after an investigation found at least $50 billion in harm to the U.S. economy each year due to Chinese intellectual property and technology transfer policies and practices.

On Thursday, U.S. Sen. Bob Corker, R-Tenn., the chairman of the Senate Foreign Relations Committee and a critic of most of Trump's import duties, conducted a congressional hearing on tariffs where he questioned the need for the duties and the claim that import restrictions are needed for national security.

The hearing came a day after the Senate voted 88-11 to support efforts by Corker, Sen. Pat Toomey, R-Pa., and Sen. Jeff Flake, R-Ariz., to ensure Congress can exercise oversight in the implementation of national security-designated tariffs on steel and aluminum imports from Canada, Mexico, and the European Union, according to a news release from Corker's office.

"From the imposition of tariffs by abusing Section 232 authorities to threats to withdraw from long-standing trade agreements such as NAFTA, these actions are hurting our business and farm communities all around the country," Corker said. "They are damaging the international relationships we have spent decades building, casting doubt on the United States and our role as a global leader and a reliable partner."

Flake, who like Corker is not seeking re-election this year, said he disagrees with his colleagues who've wanted to give Trump a bit more leash on trade in hopes of getting a better deal in trade talks. He predicted that within a month or so lawmakers will agree on a binding measure to block some tariffs sought by Trump.

"We have the power to stop him," Flake said.

The Associated Press contributed to this report.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340


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