Preliminary Duties Imposed on Chinese Tile Imports

WASHINGTON, DC — The U.S. Commerce Dept. has announced a preliminary determination in a countervailing duty investigation into Chinese ceramic tile imports, affirming charges that the imports are subsidized by the Chinese government and sold in the U.S. at less than fair market value.

Commerce Dept. officials announced their decision last month in the wake of a determination by the U.S. International Trade Commission (ITC) that there is a reasonable indication that U.S. suppliers are being materially injured by reason of the Chinese imports.

Both the Commerce Dept. and ITC have been conducting antidumping duty and countervailing duty investigations to determine whether ceramic tile from China is being “dumped” in the U.S., and if Chinese producers are receiving unfair government subsidies. The investigations were initiated as the result of an unfair-trade petition filed in April by the “Coalition for Fair Trade in Ceramic Tile,” a U.S. manufacturing alliance that includes American Wonder Porcelain, Florida Tile, Crossville, Florim USA, Dal-Tile Corp., Landmark Ceramics, Del Conca USA and StonePeak Ceramics.

The eight-member coalition, which claims the imports are causing injury and damage to the domestic ceramic tile manufacturing industry, has been pushing U.S. trade officials to impose unfair-trade penalties on Chinese imports of ceramic and porcelain tiles, as well as mosaics and decorative tiles commonly used for countertops, flooring, walls and other kitchen/bath applications.

As a result of last month’s Commerce Dept. decision, trade officials said they will instruct U.S. Customs and Border Protection agents to collect cash deposits from importers of Chinese ceramic tile based on preliminary countervailable subsidy rates ranging from 103.77% to 222.24%.

Antidumping and countervailing duty laws provide American businesses with a mechanism to seek relief from the harmful effects of the unfair pricing of imports into the U.S. Foreign companies that price their products in the U.S. market below the cost of production or below prices in their home markets are subject to antidumping duties. Companies that receive unfair subsidies from their governments — such as grants, loans, equity infusions, tax breaks or production inputs — are subject to countervailing duties aimed at countering the subsidies.

According to Commerce Dept. figures, imports of ceramic tile from China were valued at an estimated $483.1 million in 2018. There are 45 government-subsidized programs alleged in the China countervailing duty probe, including lending, tax and grant programs, the Commerce Dept. said.

Commerce is scheduled to announce its final determination in the case on or about January 22, 2020. If Commerce makes an affirmative final determination, the ITC will be scheduled to make its final injury determination on or about March 6, 2020. Importers are liable for any duties imposed.

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