USITC Offers Quartz Import “Remedy”

WASHINGTON – Quartz-surface imports would face a variable tariff, but not an annual cap on volume – under a “remedy” solution stated yesterday by the United States International Trade Commission (USITC).

The solution, proposed as part of the Section 201 (or Safeguard) action sought by U.S. quartz-surface manufacturers, will be forwarded in mid-month to President Donald Trump.

The president can use the USITC recommendation or compose his own solution using import tariffs, quotas, and possible trade agreements. The final determination will be in place for four years.

While the USITC agreed last month with the Quartz Manufacturers Alliance of America (QMAA) Safeguard petition citing “serious injury” to domestic production due to an import surge, the federal board crafted a different strategy for solving the problem.

Key to the USITC proposal is a tariff-rate quota to slow the amount of quartz-surface imports. For the first year, quartz-surface-import tariffs would be 25% until total shipment reach a certain level; after that, imports would face a 40% duty.

The proposal would set the annual quota at 140 million ft² for the first year. However, the USITC recommends that the quota be divided evenly between quarters, so the higher tariff would become effective when imports pass 35 million ft² in a specified three-month period.

Both sets of tariffs would be decreased annually by 1%. The rate-quota level would rise to 159 million ft² in the second year, 164 million ft² in the third, and 169 million ft² in the final year. There would be no “hard cap” to limit the annual total amount of quartz-surface imports.

The USITC also recommends that countries with current free-trade agreements with the United States, including Canada, Mexico, Singapore and South Korea, be excluded from the tariff. The commission noted these countries “were not a substantial cause” of the import surge cited by the QMAA in its petition.

USITC Commissioner Jason Kerns also recommended “de-stacking” the tariffs to not subject imports to additional duties, although unfair-trade duties (such as the ones assessed on quartz-surface imports from China, India, and Turkey) would remain in effect.

Kerns also proposed a tariff exemption “in the case of a demonstrated lack of production in the United States for a particularized quartz-surface product, or in the case of a critical short supply of a particularized quartz-surface product from domestic sources.”

The USITC recommendations are far less stringent than the QMAA suggested in its Safeguard petition. The manufacturers recommended an initial 50% tariff, with a 1% annual reduction, on all quartz-surface imports with no exclusions.

The QMAA also asked for a hard limit in imports of 155 million ft² in the first year, with a 5 million ft² annual increase to a final 170 million ft².

The USITC recommendations go farther, however, than a proposal from Safeguard-action foes presented at an April 14 hearing, which called for no tariffs on the first 193 million ft² per year and a “moderate tariff” for any shipments beyond that limit.

Kerns agreed with the QMAA’s proposals for using quartz-surface-import tariff revenues to “downstream users” to mitigate tariff effects, strengthening enforcement to curb circumvention of the tariffs, and start international negotiations to reduce foreign overcapacity that affects domestic production.

The final report on the Safeguard action, including the tariff recommendations, will be sent to the president by May 18.