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Workers move imported quartz slabs at Marble Uniques in Tipton, Ind., May 3, 2019.
Photo:
Michael Conroy/Associated Press
Raising U.S. home prices, disrupting supply chains and killing off manufacturing jobs are not among President Biden’s stated economic goals. But you wouldn’t know it from the Commerce Department’s latest trade “remedy.”
In June Commerce assigned a preliminary 323% antidumping duty on quartz made by Antique Group, one of the largest Indian suppliers to the U.S. Quartz from another 51 Indian suppliers faces a new U.S. duty of nearly 162%. Commerce recently held hearings on the matter and has until Nov. 1 to make a final ruling.
Quartz is now the top choice for countertops in American homes, and India supplies about 25% of U.S. quartz imports—which from all foreign suppliers were close to $2 billion in the past 12 months. The punitive rates will add costs for home buyers. Tens of thousands of U.S. direct and indirect jobs—from importers and fabricators to distributors and installers—rely on competitively priced quartz slabs.
U.S. prices for quartz countertops have already risen 15%-20% in the past two years owing to supply-chain issues, according to MSI, one of the largest U.S. distributors. If the new duties go into effect, importers will have little choice but to try to pass them onto customers. MSI estimates quartz countertop prices will rise by double digits if the new duties are imposed, while constricted supply will delay building and remodeling projects.
Then again, raising prices and crippling the competition seems to be the point of this exercise. The sole petitioner is Minnesota-based Cambria Co., which in its initial petition against Indian quartz in May 2019 stated that it “accounts for more than 50 percent of domestic production.” It says it sources its quartz in North America but won’t say if that’s Mexico, Canada or the U.S.
In April 2020, after its investigation of the two largest Indian suppliers to the U.S. market—Pokarna Engineered Stone Ltd (PESL) and Antique—Commerce assigned duties of 2.67% to the former and 5.15% to the latter. All other Indian suppliers were assigned a duty of 3.19%.
But Cambria wasn’t satisfied and in June 2021 it petitioned for a review of the earlier findings. Commerce again asked for cost and price data from PESL and Antique. PESL filed its paperwork on time and received a zero duty. But Antique’s filing arrived five hours late owing to a clerical error.
Commerce took advantage of the slip-up to invoke its right, under antidumping law, to employ “adverse facts available” to calculate the new Antique duty. Those facts come from Cambria’s petition, which, according to Commerce, requested the triple-digit duty. The new duty for the 51 other suppliers is the midpoint of the two new rates.
If this seems capricious, it gets worse. Importers will now be retroactively dinged at the higher rate on their Indian quartz purchases from December 2019 to May 2021, even though the opportunity to pass on that cost to buyers is long gone. The liability could total $300 million, according to MSI. Scores of companies could go under when faced with the bill.
This is case study in how businesses use trade law to undermine rivals. Maybe Commerce Secretary
Gina Raimondo
should take a look at how her trade bureaucracy is punishing American consumers and entrepreneurs.
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